The End of Quantitative Easing FIT Group Papers n.1 Monetary Policy Series
Fit group analysts believe that a rise in the Fed interest rates will occur over the next year but that this will be limited, less than 0.75%. Therefore, in 2016, should political and economic conditions remain under normal conditions, the Fed will keep rates under 1%. Possible driving decision factors: o International political pressure on the Fed not to tighten its monetary stance; o Persistence of the European Union economic crises; o Need to mitigate the impact of looming energy/shale gas bubble; o The rise of a currency war between the USA and Europe sparked by the European public finance austerity; o US economy grows without inflationary pressures; o Frontier markets get killed as US drains liquidity; o US debt ceiling default; o China’s US Debt Auction forces the Fed’s hand; o Concerns arise about the growth-without-equity paradigm of globalization; o Saudi Arabia and OPEC countries increase production to frustrate US fraking; o Private consumption increases due to the economic expansion; o US junk bond bubble bursts.
The End of Quantitative Easing FIT Group Papers n.1 – Monetary Policy Series Lead Analyst: Dr. Emanuele Canegrati
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