Why the Fed is in 'serious danger of hubris'

clock

Any decision on rates by the Federal Reserve this year could damage markets as the central bank's efforts have so far only resulted in lacklustre growth and 'bubble' asset prices, according to Jan Dehn, head of research at Ashmore.

Financial markets are sitting on a time bomb. Since 2008/2009, a massive rally in developed market assets has been predicated almost entirely on a large 'doubling down' of monetary policy, including zero interest rate policies and quantitative easing.  This enormous easing effort in effect extended an already 30-year period of monetary easing that had seen 10-year US treasury yields fall from 16% in the early 1980s, and had culminated in the 2008/2009 debt crisis.  The decision to respond to the debt crisis in 2008/2009 with further monetary easing – rather than monetary tightening as...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on US

US adds 227,000 jobs in November as unemployment rate edges up
US

US adds 227,000 jobs in November as unemployment rate edges up

Unemployment rate at 4.2%

Sorin Dojan
clock 06 December 2024 • 2 min read
US economy expands by 2.8% in Q3
US

US economy expands by 2.8% in Q3

‘In line with the preliminary estimate’

Sorin Dojan
clock 27 November 2024 • 1 min read
Investors divided over impact of Trump's tariffs
US

Investors divided over impact of Trump's tariffs

'Means of negotiation'

Sorin Dojan
clock 27 November 2024 • 4 min read
Trustpilot