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The Central Bank Divide: 3 Implications for Investors
June 11, 2014 at 19:00 PM EDT
Major central banks are no longer moving in lockstep. In addition to continuing with its tapering program, the Federal Reserve (Fed) may move to normalize interest-rate markets earlier than some expect, given that recent strong economic data – including last week’s labor market and manufacturing reports – confirm that the U.S. economy is recovering at a steady pace. But while the Fed is moderating its monetary accommodation and will likely start to raise rates by next year, other central banks are moving in the opposite direction. Last week, given the growing risk of deflation in Europe, the European Central Bank (ECB) further eased monetary policy. Included in its actions was a move to push short-term deposit rates into negative territory, the first time a major central bank has attempted this. The ECB’s combination of rate cuts and other measures, including a commitment to expand its arsenal if necessary, add up to a significant easing of credit […] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
Major central banks are no longer moving in lockstep. In addition to continuing with its tapering program, the Federal Reserve (Fed) may move to normalize interest-rate markets earlier than some expect, given that recent strong economic data – including last week’s labor market and manufacturing reports – confirm that the U.S. economy is recovering at a steady pace. But while the Fed is moderating its monetary accommodation and will likely start to raise rates by next year, other central banks are moving in the opposite direction. Last week, given the growing risk of deflation in Europe, the European Central Bank (ECB) further eased monetary policy. Included in its actions was a move to push short-term deposit rates into negative territory, the first time a major central bank has attempted this. The ECB’s combination of rate cuts and other measures, including a commitment to expand its arsenal if necessary, add up to a significant easing of credit […]
