Baku. 21 September. REPORT.AZ/ The recent decisions made by the US Federal Reserve System (Fed) and the prospects for monetary policy are likely to lead to a change in the value of financial assets in financial markets.
Analytical Group of Report informs, profitability in securities market will begin to increase. The reason for this is that the Fed has continued to gradually increase its discount rate. Notably, probability of increasing the Fed's discount rate in December up to 62%. This indicator was 22% on September 8, and 50% before the meeting.
Capital markets, especially stock exchanges, are not projected to decline in the near future then a decrease in liquidity in the financial markets may further reduce the value of assets in the markets.
Notably, Fed decided to decrease its balance by $ 10 bln a month.
Notably, Fed's balance includes $ 2.7 trln. government and $ 1.8 trln. dollar mortgage securities. The volume of decline in the first quarter of 2018 is estimated at $ 20 billion per month, then $ 12 billion and $ 8 billion respectively. However, since the last quarter of the next year, the Fed plans to decrease its balance by $ 50 billion, which can cause a serious liquidity problem in the global financial markets. Raw material prices will remain at a high level in 1 year for Fed to be able to implement its program. The price of oil will be $ 50 per barrel, and gold will be sold at $ 1,200 barrel.
Analytical Group of Report believe, financial markets may face certain difficulties due to the sharp increase in discount rates by Fed in the last quarter of 2018 and first quarter of 2019: "In this case, we can see serious decrease in the price of financial assets."