Fed Quantitative Easing Monetary Policy Impact Assessment And Realistic Reference

Since the2008global financial crisis, countries are seeking policies to restore economic growth. Fed dramatically cut the federal funds rate is maintained at0-0.25%above the level and act as a lender of last resort is a U.S. and the global economy to provide a lot of liquidity. The Fed hopes that by QE1and QE2can stimulate U.S. economic growth and consumption, reduce unemployment rate, and reduce the uncertainty of the economic recovery process. However, the economic data in the United States, this two rounds of quantitative easing monetary policy did not reach the Fed is expected to effect not only the unemployment rate is not effective in improving but triggered a global inflation. Hegemonic expansion of the U.S. debt to the United States sovereign credit has been questioned, the third round of quantitative easing monetary policy implementation, at the same time, the Fed hopes to combat exports to China through trade bill. This unconventional monetary policy brings greater threat to global economic recovery. Therefore, the correct evaluation of the Fed’s quantitative easing monetary policy of rational use of monetary policy response to the crisis has practical significance.In this paper, through the quantitative easing monetary policy implication and theoretical background of the analysis studies comes to the conclusion that the response to the crisis the only effective way is by direct injection of liquidity to the market, So the monetary authorities should take the quantitative easing monetary policy, But this is just as the theoretical basis. The fact that the United States is different from Japan, Dollar as the international monetary system reserve currency, the easing of dollar is not only have an impact on the U.S. economy, but also it will produce a spillover effect through the United States and economic contacts among all countries. Then it is extremely necessary to analyze the spillover effects of quantitative easing of monetary policy in the United States. This article on the United States in nearly a decade economic indicators, as well as the Fed’s balance sheet of the structural analysis to determine whether the U.S. economy to recover, and analyze the effect of the quantitative easing of monetary policy implementation and worldwide the positive effects and negative impacts. This paper is the complete research and systematic analysis to the quantitative easing monetary policy spillover effect. This article mainly view is the U.S. quantitative easing monetary policy for the American economy has been gradually improved, but it can’t reach the U.S. government expected. Moreover, in the substantial depreciation of the dollar of process, each country gradually emulate the United States to take quantitative easing monetary policy, this is the United States faces economic recovery another big problem, it is also a reason which would cause of the future global inflation.In addition, this paper puts forward suggestions on how to deal with the negative effects of the QE policies on China’s monetary authorities. The Chinese monetary authorities should limit the weakness in exchange rate system on domestic policy, promoting the diversification of its foreign exchange reserves to get rid of the status quo of excessive dependence on the US dollar. At the same time, in the domestic economy, we suggested that the central bank and government policies should be compatibly matched, the improve credit endogenous creation mechanism, to avoid the impact of international hot money on Chinese real economy, the ultimate goal should be put on the effective interaction between government and market mechanism to ensure employment and national welfare objectives.