The FED response to the coronavirus threat brought to an interest rates cut of 0.5%. What to expect in monetary policy? In times of rising uncertainties this decision comes …
The trade war between U.S. and China appears to have reached a turning point. The trade agreement is surely a political victory for Trump however the issues that started the trade war still need to be addressed.
While cutting rates to sustain economic growth might be effective for the short-term, it has very little to do with long-term economic growth.
Federal Reserve cuts interest rates for the third time in 2019, but suggested that could be the last for a while. However, it keeps a door open to further policy responses.
In his last speech, Mario Draghi gives lots of suggestions for the improvement of the stability of the eurozone and calls for a stronger commitment from governments to work towards a higher level of integration.
The FED cut interest rates while we are in the second longest expansion in history. Trade wars and high debt might be the catalyst for the crisis and traditional monetary policy won’t be enough this time.
The next 10 years on the markets are likely to be the opposite of the last 10 and gold is a hedge that comes with a “central banks guarantee”.
The economy keeps getting stimulated by monetary policy, through years of low interest rates everyone got high levels of debt. Keep the economy going became the main goal of central banks, even if this implies sacrificing national currencies.
As the FED is oriented towards another monetary easing, gold prices recorded new 5-years highs. Cutting interest rates to push the economy will soon stop to work.
How is that the economy is growing without any real increase in productivity? The answer is debt. While it is true that in the immediate can help, over the long-term we might not like the consequences