Cullen Roche | Apr 20, 2015 12:14AM ET
Greg Ip had a piece in the Wall Street Journal arguing that the Fed has caused the US economy to slow down. He says that the Fed has already started to tighten policy (by ending QE) which is leading to expectations of slower future growth which is hurting economic activity.
There are a couple of big problems with this thinking though:
This doesn’t mean these Central Banks are having no impact on future growth with their various iterations of QE. But I think economists have a tendency to try to imply that Central Banks are steering the economy with their various actions. I just don’t buy the story that Central Banks steer the economic ship to the extent that many economists seem to believe. And the contradicting stories in the USA and Europe at present would appear to prove that to be emphatically true.
* This post has been corrected for an initial error in the break-even chart.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.