Trump continues to blast the EU, China and even Fed (well of course not Russia, nor North Korea) with his tweets today
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For those who’re new to the markets, the 2007-2008 global financial crisis started with the bursting of the subprime mortgage bubbles in the US. Fed cut policy rate to 0-0.25% in December 2008. And in late November that year, Fed started QE1. In 2011, Fed started QE2. And in 2012, Fed started QE3.
ECB cut the main policy rate to 0.25% much later in 2013 and then subsequently to 0.00% in 2016. While ECB used the Securities Markets Programme since 2010, QE is seen as formally started in 2015.
The current situation of US rasing interest rate is a result of the US leading the way in loosening monetary policy to counter the problem of theirs.
And, would Kudlow or Navarro or give him a lesson that Fed’s rate hikes are still not tightening, but policy normalization, or removal of accommodations. The US economy has been enjoying the privileges of ultra loose monetary policy and it’s time to treat it as it should be treated.
And if the Fed doesn’t normalize its policies during a time when the economy is doing so well, what is left for Fed is save the economy when the next crisis comes?
The above are some common sense indeed. But for those who choose to ignore, our response is like someone who said this week — “where do we start?”
