[Good Morning Stock Market] US Economic Stimulus Package and FOMC

(New York AP=Yonhap News)

[Asia Economy Reporter Junho Hwang] In the United States, as a $1,400 COVID-19 relief payment is being distributed per person, attention has focused on where this money will flow this week. The key issues are how much it will affect inflation and interest rates, and how the market will interpret these changes.

Especially from the 16th to the 1st (local time), the Federal Open Market Committee (FOMC), which decides U.S. monetary policy, will convene. With the European Central Bank (ECB) officially announcing an increase in bond purchases, there is an expectation that the FOMC will once again confirm a dovish stance. As market interest rate volatility increases, there is growing interest in how this will impact the domestic stock market, which is also experiencing fluctuations.

According to U.S. broadcaster NBC on the 15th (local time), stimulus payments have begun to be deposited into American accounts nationwide as part of the $1.9 trillion economic stimulus package. Kang Songcheol, an investment strategy researcher at Shinhan Financial Investment, explained, "With the implementation of the stimulus package, the U.S. economic growth rate is expected to increase by more than 3 percentage points, potentially exceeding 7%, which would be the highest figure since the 1980s."

Kwon Heejin, a macro team researcher at Korea Investment & Securities, said, "Even if the Federal Reserve (Fed) maintains a positive economic outlook, it is likely to keep the dot plot unchanged." She added, "Although the unemployment rate forecast has decreased, it still diverges from the full employment level of the mid-3% range." Her view is that attempts to raise economic forecasts while lowering interest rates amid unstable expected inflation could further stimulate inflation expectations, thereby diminishing the effectiveness of Fed policies. As of the 12th, the U.S. 10-year Treasury yield stands at 1.625%.

Shin Eol, a researcher in the asset strategy team at SK Securities, forecasted, "Domestic bond yields are expected to remain slightly weak," noting, "After a comprehensive upward adjustment in interest rate levels, volatility has increased, and bearish factors still dominate." He added, "We are in a situation where mixed signals must be interpreted," and analyzed, "Interest in the FOMC is also heightened."

This content was produced with the assistance of AI translation services.