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2013年10月14日 (月)

FRB新議長 出口戦略引き継ぐ重い責任

The Yomiuri Shimbun October 14, 2013
Next Fed chief must address difficult task of quantitative-easing exit policy
FRB新議長 出口戦略引き継ぐ重い責任(10月13日付・読売社説)

Although widespread belief that the right person has been chosen is sending a sense of relief through the markets, a mountain of difficulties awaits the next chief of the U.S. Federal Reserve Board.

The abilities of the Fed’s new leader are certain to be put to the test regarding when and how to effect an “exit strategy”—in other words, scaling back the United States’ extraordinary quantitative monetary easing policy.

President Barack Obama has nominated Janet Yellen, vice chair of the Board of Governors of the Federal Reserve, to succeed Ben Bernanke as chairman of the U.S. central bank. Bernanke’s second term ends on Jan. 31.

Once she is confirmed by the Senate, Yellen will take the top Fed post in February to become the first woman to head the world’s most influential central bank in its 100-year history.

In a news conference Wednesday after his nomination of Yellen, Obama said she is “exceptionally qualified” to tackle unemployment, which he called the most urgent task facing the U.S. economy.

An economist specializing in unemployment issues, Yellen has so far thrown her support behind Bernanke, who has led the Fed’s bold money easing policy since the financial crisis triggered by the 2008 Lehman Brothers bankruptcy. She is regarded by the market as likely to continue steering Fed policy in the same direction as Bernanke, and there will probably be no major policy changes.

Obama’s nomination of Yellen seems to have come from a judgment that promotion of the vice chair to the top post would best ensure the stability of U.S. financial policy, avoiding the market turmoil that could result from the replacement of the central bank head.

Because of the protracted standoff between the ruling and opposition parties in Congress, a federal budget for the new fiscal year has yet to be enacted, causing a partial shutdown of U.S. government services. If the legislature fails to reach an accord on raising the government debt limit, the possibility of the U.S. government plunging into a fiscal default crisis could become reality.

In nominating Yellen, Obama may have aimed to swiftly conclude the nomination, thereby eliminating any uncertainty felt by the markets.

A dove on money easing

At the news conference, Yellen referred to the serious problem of U.S. unemployment and pledged to do her utmost to expand employment.

Stock and other financial markets have welcomed her nomination, presumably from expectations of Yellen as a “dove” who gives priority to economic growth and employment and therefore actively favors monetary easing.

Since September last year, the Fed has enacted the third phase of its quantitative monetary easing policy, called QE3, purchasing Treasury and mortgage bonds worth $85 billion (about ¥8.4 trillion) every month.

It is obviously impossible to continue the QE3 permanently, and sooner or later the Fed will have to steer toward normalizing financial policy. The focus of attention in this respect is when to begin the process of phasing down the purchasing pace to eventually end the money easing policy.

Having refrained from reducing its bond purchases last month, the Fed is considered likely to start trimming such purchases in December. There is still speculation, however, that the start of the unwinding process could be delayed to early next year if improvement in the employment situation and the pace of business recovery are slow.

Rough and careless enforcement of an exit strategy runs the risk of nipping an uptrend in the U.S. economy in the bud. On the other hand, delaying implementation of the exit strategy could lead to such adverse outcomes as dangerous bubbles in assets like stocks and real estate.

Now is a daunting time in which the question must be addressed of how to realize a soft landing for terminating the QE3 while also paying due attention to the need for the Fed’s so-called dialogue with markets.

Sufficient attention must also be paid to the danger of changes in the U.S. economy adversely affecting global business trends, including in Japan and emerging economies.

The incoming Fed chair will bear extremely heavy responsibilities.

(From The Yomiuri Shimbun, Oct. 13, 2013)
(2013年10月13日01時34分  読売新聞)


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