Feb 22, 2013

Why we should be cheering on the US Federal Reserve

With momentum against further quantitative easing building, the dollar's long run above parity might finally be near an end, with some nudging.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

US federal reserve

The March 19-20 meeting of the Federal Reserve could very well redefine the international economy for 2013 and 2014, start easing the strain on the federal budget in Australia, and hand the new government after September 14 a much easier playing field to negotiate than the current one dominated by the strong dollar.

If we listen to the pet shop galahs in the Australian media and economic commentariat, then Australia will be crushed by the easy money spilling from the spending regimes of the world’s major central banks, especially the Bank of Japan. But as Crikey reported yesterday, the outlook is changing for these bouts of quantitative easing from the US Fed, the European Central Bank, the Bank of Japan and the Bank of England. There’s now doubt that the Fed will continue its $US85 billion of purchases each month into 2014, and the key policymaking committee of the Bank of England stood up and rejected an attempt by departing governor Mervyn King and two others to push through an increase in its spending.

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One thought on “Why we should be cheering on the US Federal Reserve

  1. Chris Williams

    “And it’s especially the fear that the Fed’s huge balance sheets (over $US3 trillion and rising) could end up harming the US economy and confidence…”

    Eh? What’s this ‘could’ white man?

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