Stuart Edwards, fixed interest fund manager at Invesco Perpetual, considers where we are in the US economic recovery and monetary policy debate, and what this means for the global bond market as we move into 2014.
The tapering debate has been raging for six months now. Since Federal Reserve chairman Ben Bernanke’s testimony to Congress in mid-May, every new piece of US economic data has been instantly interpreted as either a reason for the Fed to begin its process of winding down quantitative easing, or to delay it. This has driven significant short-term market moves. But, as we move into 2014, the trend in US economic data is clear enough. The recovery is strengthening, and the question the Fed faces is not if it should tighten monetary conditions, but when. Employment data has been watched mo...
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