Get ready for ‘QE4,’ says analyst at Credit Suisse
The Federal Reserve’s actions to calm the stresses in short-term funding markets haven’t worked, said a key analyst who predicts that the central bank may have to resort to a fresh round of crisis-era monetary policy.
“If we’re right about funding stresses, the Fed will be doing ‘QE4’ by year-end” Zoltan Pozsar Fed Chairman Jerome Powell has described the turmoil that recently caused short-term rates to spike back in September as “technical” and “under control.”“Year-end in the [currency] swap market is thus shaping up to be the worst in recent memory, and the markets are not pricing any of this,” he told clients.
Some strategists have called the important funding mechanism as broken, with James Bianco, founder of Bianco Research in Chicago, telling MarketWatch last week that the central bank hasn’t done enough to improve liquidity into the financial system.In a Monday report, the Bank for International Settlements said an unwillingness among leading U.S.
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