Yesterday, Ben Bernanke said that the Fed would start to wind down its QE program sometime this summer as I indicated early last week I believed the timetable would be. Market pundits believe these remarks triggered a sell-off in global equities, with Japan being hardest hit as the Nikkei fell 7.3% this morning. I was more concerned about the poor Chinese PMI print. But if the pundits are right, it is an extraordinary move into risk-off thinking given that the Fed had telegraphed its intentions. This incident shows you how the Fed's exit path is fraught with risk. Japan is another story altogether.
Early this month, I noted that the data started to break a bit to the downside and wrote my daily commentary saying that as the US economy stalls, the Fed’s timetable is getting pushed back. Sin...
As this site is now reader-supported via Patreon, the remainder of this article is only available to subscribers at a specific patronage level. Articles at patronage levels BRONZE, SILVER, and GOLD are denoted by the categories in blue capital letters above the post. Posts categorized DAILY are available to both SILVER and GOLD patrons.
Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.