Global investors are waiting for the latest meeting on interest rates the Fed’s statement.

The reason why the proposed rate would be of broad interest, because it will in the future to play an important role in the global economy. The Fed is widely expected to officially launch the second round of quantitative easing measures, at the same time, the euro zone, Britain, Japan and other large-scale no intention of easing the economy will be no choice but to follow up, thus opening the global monetary policy “second quantifiable” big screen.

Federal Open Market Committee will assess the second quantitative easing “pull the possibility of employment and stable prices,” decided the size of delivery, and creations of the current market size is the size of because it will determine the market direction.

The Fed is widely expected to acquire the assets of the scale may be introduced in the 500 to 1000 billion U.S. dollars between. If the size reported lower than expected, a short-term correction is inevitable; if exceeded market expectations, a capital carnival will be staged.

Second shot is really such circumstances the Fed. Earlier this year the U.S. economy as a short-lived recovery in the second quarter economic growth rate of only 1.6%, into the volatile situation in the second half, the unemployment rate at 9.6% always stuck atop a high point, the core inflation rate hovering around 1%, lower than Fed 2% target set. With the first round of the quantitative easing policy of diminishing marginal utility, the second recession began to spread panic: it has been plunged into the policy void “liquidity trap”, the Great Depression of the last century, it will be 30 years again?

Effective demand in the face of the market situation is still insufficient, consumption, investment, exports and government expenditures are incompetent force: personal consumption since the credit bubble brought to its knees, and hurt the investment weak, Obama’s plan to double exports is difficult to be immediate, the White House National Summers, director of the Economic Commission for promotion of the 200 billion U.S. dollars subject to a huge deficit of government stimulus plan ran aground in Congress. Bernanke’s turn this time to play, release on the Federal Reserve once again described as “ripe.”

In fact, in August or September of this year, the Fed had launched the QE in disguise, quantitative easing will be the first time again for the purchase of bonds maturing funds. But in September the meeting on interest rates, the majority of policy makers was “fierce storm was not enough”, called for further relaxation of the policy to provide support for the weak economic recovery.

Chicago Fed President Charles Evans as the representative of the officials that the U.S. economy has fallen into “a true liquidity trap”, it called in for the “drastic” intervention.

Aware of the dangers of deflation, to “anti-deflation fighter,” Ben Bernanke-led Fed will naturally not sit still. This can act, the Fed expects the market through the injection to avoid deflation.

The beginning of March 2009 the cumulative size of the first round of quantitative easing 1.7 trillion. However, monetary policy in such a large-scale economic stimulus lackluster. So, a new round of quantitative easing in the end need to invest more mass to be effective? It is still the Fed eyesight test.

Fed officials are there differences in decision-making to the Atlanta Federal Reserve officials as the representative of the main ideas second round of quantitative easing should be large enough scale, large enough to work on the market so far.

Ben Bernanke apparently succeeded in persuading the majority of members supported the second quantitative easing, but in size have scruples. According to Goldman Sachs estimates, the Fed secondary quantitative easing in order to work, at least 4 trillion U.S. dollars in size. But Bernanke have the guts to it? Even if he has, all aspects of the situation is not as he wished.

The first is for U.S. dollars, the U.S. budget deficit next year will exceed 1.4 trillion U.S. dollar if or “stumble endlessly,” is bound to affect a large number of government bonds. The first round of quantitative easing, the dollar index has dropped from 89 to 74, and since late August came the news of the second quantitative easing, the dollar index has dropped to 8.87%. Geithner on the recent strong dollar even thrown, potentially causing a certain amount of pressure to Bernanke. Control of the second round of quantitative easing the impact on the dollar, Bernanke must figure out a good strength.

In addition, the restart after the quantitative easing Fed faces a more serious challenge: how to ensure that changes in inflation from the deflation process to inflation just right to stay in the 2% of the Federal Reserve kept secret on the bottom line? Once climbed to more than 5%, hyperinflation will come. Therefore, the Fed brings up the quantitative easing is tantamount to playing with fire, no wonder Thomas Heney refused to vote for hope in any case.

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