Fit group analysts believe that the Fed will raise interest rates by less than 0.75% over the next year and keep rates under 1% in 2016 if political and economic conditions remain normal. Possible factors that could influence the Fed's decision include international political pressure not to tighten monetary policy, ongoing European economic crises, concerns about bubbles in energy markets and junk bonds, and changes in private consumption or currency wars.

1. The End of Quantitative Easing
FIT Group Papers n.1
Monetary Policy Series

2. Fit group analysts believe that a rise in the Fed
interest rates will occur over the next year but
that this will be limited, less than 0.75%.
Therefore, in 2016, should political and economic
conditions remain under normal conditions, the Fed will
keep rates under 1%.
Possible driving decision factors:
o International political pressure on the Fed not to tighten its
monetary stance;
o Persistence of the European Union economic crises;
o Need to mitigate the impact of looming energy/shale gas bubble;
o The rise of a currency war between the USA and Europe sparked by the
European public finance austerity;
o US economy grows without inflationary pressures;
o Frontier markets get killed as US drains liquidity;
o US debt ceiling default;
o China’s US Debt Auction forces the Fed’s hand;
o Concerns arise about the growth-without-equity paradigm of globalization;
o Saudi Arabia and OPEC countries increase production to frustrate US fraking;
o Private consumption increases due to the economic expansion;
o US junk bond bubble bursts.

3. The End of Quantitative Easing
FIT Group Papers n.1 – Monetary Policy Series
Lead Analyst: Dr. Emanuele Canegrati
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