Global Monetary Conditions Monitor: No more rate hikes from the Fed in 2017

Global Monetary Conditions Monitor: No more rate hikes from the Fed in 2017

By Lars Christensen, Founder & CEO, Markets & Money Advisory                  

 We have today published the second edition of our Global Monetary Conditions Monitor, which covers monetary policy in 25 countries – including inflation forecasts for these countries.

 Some of the key messages in the Monitor are the following:

  • Despite monetary conditions being broadly neutral in the US it is more likely that the Federal Reserve will undershoot rather than overshoot its 2% inflation target on a 2-3 year horizon. Consequently, we see no need for further rate hikes from the Fed in 2017.
  • Given present monetary conditions in the euro zone, we believe that the ECB is on track to deliver on its 2% inflation in the medium-term. However, we are somewhat worried about pressures, particularly from the Bundesbank on the ECB to “normalise” monetary policy.
  • Canadian monetary conditions have become excessively tight and the Bank of Canada needs to act to ease monetary policy.
  • Monetary conditions in the UK and Sweden have become too easy and both the Riksbank and the Bank of England should gradually move towards a more tight monetary stance.
  • Icelandic monetary conditions are far to easy and inflation could be heading towards 4% in the medium-term if monetary conditions are not tightened.

Also watch my comments on our main message in the Monitor below.

You can subscribe to the Global Monetary Conditions Monitor here or by contact us by e-mail by writing to support@mamoadvisory.comThe subscription fee is EUR 2,000 for 12 months. 



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