Over the next few weeks, the US Federal Reserve is expected to raise interest rates, while the European Central Bank doubles down on monetary stimulus. Although both central banks are pursuing legitimate domestic agendas, there are few mechanisms to manage the international repercussions of this policy disparity.
WASHINGTON, DC – Over the next few weeks, the US Federal Reserve and the European Central Bank are likely to put in place notably different policies. The Fed is set to raise interest rates for the first time in almost ten years. Meanwhile, the ECB is expected to introduce additional unconventional measures to drive rates in the opposite direction, even if that means putting further downward pressure on some government bonds that are already trading at negative nominal yields.
WASHINGTON, DC – Over the next few weeks, the US Federal Reserve and the European Central Bank are likely to put in place notably different policies. The Fed is set to raise interest rates for the first time in almost ten years. Meanwhile, the ECB is expected to introduce additional unconventional measures to drive rates in the opposite direction, even if that means putting further downward pressure on some government bonds that are already trading at negative nominal yields.