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2008年12月18日 (木)

米ゼロ金利 ついに踏み切った異例の策

The Yomiuri Shimbun (Dec. 18, 2008)

Fed entering uncharted territory in crisis fight

米ゼロ金利 ついに踏み切った異例の策(1218日付・読売社説)

The U.S. Federal Reserve Board finally decided Tuesday to adopt a zero-interest-rate policy. It also announced the introduction of a policy of quantitative easing--unprecedented measures for dealing with the current economic turmoil.


The Fed lowered the target range for the federal funds rate--its benchmark interest rate for short-term interest rates--by 0.75 to one percentage point, to zero to 0.25 percent. This is the first zero percent interest rate in real terms in the history of U.S. financial policy.


The U.S. economy has been in recession since December last year. The financial crisis has splashed cold water over the real economy and sharply increased unemployment. Many fear the worst recession since the Great Depression, while an increasing number of economists also are concerned about deflation.


The Fed's unprecedented action apparently is aimed at preventing the economy from deteriorating further and to stop deflation from taking hold.


Expressing strong concern, the Fed said in its statement that it "will employ all available tools to promote the resumption of sustainable economic growth."



Breaking new ground

Some economists argue the effects of interest rate cuts will be limited because interest rates were already extraordinarily low.


However, the introduction of a policy of quantitative easing, such as purchasing long-term U.S. Treasury and government-agency securities in substantial quantities to increase financial liquidity, is expected to be effective.


This is a dramatic shift in financial policy from its interest rate intervention-based approach so far, and the Fed is entering unknown territory.


The Fed has been actively buying commercial paper issued by private corporations, but is planning to further increase financial liquidity. This is an attempt to support the economy by helping lower interest rates for housing and other long-term interest rates.


The Fed could learn from the quantitative easing policy the Bank of Japan implemented for five years from March 2001. The Bank of Japan tried to snap the Japanese economy out of deflation by purchasing a large quantity of securities from financial institutions.


This policy is said to have been effective to a certain degree in supporting the economy by supplying sufficient funds to banks and other financial institutions. However, the application of the policy presented challenges, such as knowing when to stop quantitative easing of the money supply.


Of course there are differences between what Japan experienced then and the current situation facing the United States. But the Fed still should heed the lessons Japan has learned as it tries to steer the U.S. economy under extremely difficult conditions.



Coordination essential

It also will become increasingly important for the Fed to coordinate its actions with the White House's fiscal policy if the current economic turmoil is to be overcome. U.S. President-elect Barack Obama is planning to take large-scale action to stimulate the economy. Both Obama and the Fed should work together to turn the U.S. economy around as quickly as possible with every fiscal and monetary policy measure available.


Meanwhile, the appreciation of the yen against the dollar continued Wednesday following the Fed's interest rate cut, which has put rates lower than those of Japan, among other factors.


Japan faces a serious recession, too. The Bank of Japan is scheduled to hold its monetary policy meeting Thursday and Friday. It is expected to consider additional monetary measures there, including interest rate cuts coordinated with the Fed.


(From The Yomiuri Shimbun, Dec. 18, 2008)

200812180130  読売新聞)


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