Whether the fluctuation of meat price will affect the monetary policy

Recently, pork and other food prices have risen rapidly, and there is a view that rising meat prices will lead to a rebound in inflation and will restrict the space for monetary easing in the future. In this regard, the relevant person in charge of the central bank said that prices are currently low, and compared with the same period last year, the current price level of about 1.5% is obviously on the low side. Moreover, the main observation will be the overall price level, and the impact of itemized price fluctuations on monetary policy is much smaller.

Under normal circumstances, itemized price fluctuations do have little impact on macroeconomic policy, even negligible in most cases. However, there are two premises that must be paid attention to, one is what the itemized price is, and the other is the itemized price in what environment and state.

Obviously, if it is the price of itemized products that have a great impact on the price as a whole, such as rice, pork and so on, we may have to attach great importance to it. Otherwise, the conductivity is very strong. In recent years, key agricultural and sideline products such as rice and pork have played a role in affecting the whole body many times, causing relatively serious price fluctuations. The price change of rice and pork is also one of the important factors affecting macroeconomic policy, especially monetary policy. Under normal circumstances, changes in itemized product prices have a very limited impact on the market and are unlikely to have any impact on macroeconomic policy. However, under abnormal circumstances, the price changes of itemized products, especially the price fluctuations of key itemized products, may have a greater impact on market changes and ultimately affect the trend of macroeconomic policy.

The current macroeconomic situation, as well as residents' expectations of price changes, is obviously not a normal state. First of all, the pattern of the economic downturn has not changed significantly, the economy is still in the process of bottoming out, and there is no timetable for when it can hit bottom and rebound and enter a state of recovery. Originally, many analysts thought that the third quarter would be a turning point in the economy, but now it seems that further observation is needed.

Second, macro policies continue to make efforts, and various measures have been introduced one after another, but the effect is not obvious. In particular, investment policies, which have achieved quick results in the past, also seem to have lost their previous skills and have not played an effective role in stabilizing growth. Among them, the central investment has not been implemented in some places and failed to achieve the expected goals, which is one of the important aspects worthy of attention. At the same time, the role of consumption in stabilizing growth has not been reflected, and the phenomenon of weak consumption is still very serious.

In addition, the stock market, which was originally used to provide positive support for stabilizing growth and promoting development, has not only failed to play a role in stable growth effectively, but has become a drag on the economy because of the influence of various factors recently. so that the management has to invest a lot of human, material and financial resources in market stability, and from the rescue measures that have been introduced, this way of rescuing the market. It is impossible not to leave some factors that need to be digested. According to the analysis of some experts, it may take about four years to digest the risk factors left by this rescue.

Finally, continued easing has left a lot of liquidity to the market, and this liquidity has not effectively flowed into the real economy. In other words, some of these liquidity are inefficient, some are extracorporeal circulation, some are rotating in the stock market, property market, and even through underground finance, once the economy stabilizes, it is difficult to guarantee that it will not become a huge thrust of inflation.

Therefore, in the face of the rapid rise in pork prices, it may not affect the overall trend of prices in the short term, but if it remains high and the stock market continues to be in a more serious shock, then the rise in pork prices is very likely to cause a chain reaction and pass on to other products. Among them, first of all, there is a chain reaction in agricultural and sideline products, and then passed on to more influential areas such as the property market. Once prices rise sharply and the economy is still in a downward state, the risk of stagflation increases. At that time, macroeconomic policy, especially monetary policy, will be in a dilemma.

At the same time, it should be noted that the question of when the Fed will raise interest rates has also become one of the very important factors affecting the market, especially the stock market. Once the Fed chooses to raise interest rates in September, it could be followed by another volatility in the stock market. Under such circumstances, if prices are no longer stable, economic risks will be transformed into social risks and become an important factor affecting social stability. Therefore, from this level, the recent rise in pork prices is also a work that requires attention and attention, and strong measures need to be taken to solve it.

In short, the rise in pork prices, do not be too nervous, but should not be taken lightly, do not think that it will not have an impact on macroeconomic trends. Pork price is not only a very sensitive price, but also a highly conductive itemized product. Generally speaking, attention should be paid to it and an effective early warning mechanism should be established. Only in this way can we take precautions and avoid adverse effects on economic stability and economic recovery.