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Monday, December 16, 2013
Taper will be Very Cosmetic
When they introduced Quantitative Easing one (QE1) in November 2008, my view was that this would be a permanent stasus, in other words that we would go up to QE99 and that they would not abandon the asset purchases. Now there has been talk about tapering for the last 6-8 months, but in my view if they taper, it will be a very cosmetic gesture and on any sign of further economic weakness, or if asset markets decline again like the stock market drops 10-20 percent they will actually increase the asset purchases. My sense is that the Federal Reserve will continue to buy assets in order to try to support the asset markets.
- in moneycontrol.com