What if the Federal Reserve and European Central Bank fail to give markets what they want? A lot of monetary easing. Given the latest remarks of a number of regional presidents, it seems that the Fed is not willing to go all-in at this point in time. It is likely to cut rates again in September, but with a growing reluctance. An actual easing cycle seems unlikely, simply because the economic data is not bad enough. For the ECB, there is much more room for cuts and the announcement of another round of QE based on stubbornly low inflation numbers. In the Eurozone, however, there is a growing political and social dislike of negative rates owing to the many unwanted side effects, such as dwindling bank profitability, zombie companies and negative savings rates. If anything, volatility looks like a given in the coming weeks.
As a senior portfolio manager I use charts to illustrate financial issues every day. I tweet my favorites as @jsblokland and was named 'one of the 50 most important people for investors to follow in 2018' by MarketWatch.
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