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.