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The End Isn't Nigh
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The End Isn't Nigh

Central Bank Challenges as the Era of Cheap Money Enters a New Phase

EIU, 2013

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Editorial Rating

8

Qualities

  • Analytical
  • Innovative
  • Visionary

Recommendation

When slashing interest rates failed to ignite a recovery in the aftermath of the global financial crisis, several developed nations resorted to quantitative easing. Central banks bought up assets, “funneling trillions of dollars of newly created money via commercial banks to the real economy.” As the world recovers, central banks inevitability will need to wean investors off cheap cash, but the mere idea creates market hysteria. getAbstract recommends this succinct assessment to policy makers, central bankers and skittish investors, who need not fear: “The end isn’t nigh.”

Take-Aways

  • As the global economy recovers, developed nations inevitably will curtail quantitative easing, which will impact the world’s financial markets.
  • Despite current concerns, the Federal Reserve will not begin to tighten liquidity before mid-2015 at the earliest.
  • The United Kingdom and Japan see no prospect of an end to easing in the near term.

About the Author

The Economist Intelligence Unit is an independent research and analysis organization.


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