The road back for the US Federal Reserve to ‘normal’ interest rates, inflation and economic growth is uncertain.
After the massive amounts of monetary easing via QE in 2008-due to the wholesale fraud conducted by the global banking system-which led to the largest bailouts in human history; there is no precedence for how central banker are to navigate their way back to a ‘normal’ economic state.
Central banks (including the BoE) will be watching with bated breath as the Fed leads the way out, since they have already followed the path into QE; such as the ECB and BoJ.
Indeed the FED and others are caught between the rocks of massive public and private debt and the hollowing out of the middle class workforce (with average wages being stagnant over decades) and inflation which has sank to almost deflationary levels –due to low energy prices; the hard place.
Energy will be key going forwards if the P5+1 negotiations with Iran are successful in June this year, since crude oil will be heading much lower once Iranian crude hits the global market. Instead of the FED forecasting/hoping for a temporary blip in inflation, this will turn into a medium to long term change towards lower supply side inflation.
This is the ‘hard’ place; the prospect of MORE QE to fight against the now deflationary forces of lower energy prices.
So the prospect for the US Dollar-in my view-going forwards will be a volatile one as the fundamentals of the above play themselves out.
After the massive amounts of monetary easing via QE in 2008-due to the wholesale fraud conducted by the global banking system-which led to the largest bailouts in human history; there is no precedence for how central banker are to navigate their way back to a ‘normal’ economic state.
Central banks (including the BoE) will be watching with bated breath as the Fed leads the way out, since they have already followed the path into QE; such as the ECB and BoJ.
Indeed the FED and others are caught between the rocks of massive public and private debt and the hollowing out of the middle class workforce (with average wages being stagnant over decades) and inflation which has sank to almost deflationary levels –due to low energy prices; the hard place.
Energy will be key going forwards if the P5+1 negotiations with Iran are successful in June this year, since crude oil will be heading much lower once Iranian crude hits the global market. Instead of the FED forecasting/hoping for a temporary blip in inflation, this will turn into a medium to long term change towards lower supply side inflation.
This is the ‘hard’ place; the prospect of MORE QE to fight against the now deflationary forces of lower energy prices.
So the prospect for the US Dollar-in my view-going forwards will be a volatile one as the fundamentals of the above play themselves out.
