The Torch is Passed
As we approach the (much anticipated) first rate hike by the Fed, the chart below demonstrates that the world will still be supported by expansionary monetary policy.
The Fed initially led global central banks in QE (quantitative easing), and now the Bank of Japan and the ECB have taken the baton to lead in quantitative easing/easy monetary policy.
In fact, the terrorist acts in Paris were a factor that resulted in the ECB announcing potential further measures. In a speech in Frankfurt today, ECB President Mario Draghi said, “If we decide that the current tracjectory of our policy is not sufficient to achieve that objective, we will do what we must to raise Inflation as quickly as possible.” (my emphasis as these words from Mr. Draghi paraphrase his famous 2012 speech when he said “do whatever it takes” to ease the Eurozone economic crisis.)
December should be an interesting month for central bank policy on a global basis.