リン先生 英文記事記事紹介 No.59
U.S. and euro zone data will help investors take the pulse of the global economy this week, but the crisis in Ukraine threatens to spoil any improvement. The crisis is having a dramatic impact on the already fragile Russian economy, dashing hopes that 2014 would be a year of recovery and placing the country instead on track for recession as investors dash to withdraw money. Diplomats have told Reuters that the first companies would be added to the list of targets to be sanctioned this week, freezing their assets in Europe and marking a toughening of stance against Russia. The European Union is Russia's top trading partner. In Europe, the president of the ECB, Mario Draghi, has said the bank is ready to act in June if slow price inflation persists. Investors are betting the ECB will cut the cost of borrowing. Some also await the launch of a program of quantitative easing (QE) or printing money to buy assets, such as bonds. But while pumping central bank money is easy to start, it is harder to unwind. The head of the U.S. Federal Reserve Janet Yellen recently said that shrinking its $4.5 trillion portfolio of assets to the pre-crisis size of $800 billion could take the best part of a decade.
Ukraine's fragile economy affects the global market. Some analysts would fear that the United States' business with Europe would get hurt and that China is slowing. However, despite the negative feedback or effects brought by the crisis, everyone is still hopeful to regain what has been lost. Some are waiting for the launch of a program of quantitative easing. Europe Central bank may buy government bonds to lower short-term interest rates and increase the money supply. But when interest rate reaches zero, this strategy loses its effectivity thus forcing the bank to try other strategies to stimulate the economy. It is indeed risky but when planned carefully it will surely be successful.