A pertinent question to ask would be: what happens to the markets if the stimulus is withdrawn by the Central Banks? The past few months has clearly indicated that the market move based on perceptions of an increase/decrease in stimulus. Any indications that the stimulus may be withdrawn leads to a fall and vice versa.
Imagining what is likely to happen to the financial and commodity markets is not difficult, thanks to the following chart, which makes it easy to correlate the impact of the past moves by the US Federal Reserve. to expand supply of money. This will be no different for the other regions.
The solace that the above chart provides: Don't worry Zero percent interest rates are here to stay for a long time - longer than what policy makers tell us!
Rising oil price should not be a problem beyond a certain point. Oil and commodity markets will go into a tailspin if there is even the slightest indication that the US Fed will withdraw the stimulus. Then the problems start for countries like India and China.
No comments:
Post a Comment