Report
Patrick Artus

Is the Federal Reserve more "reasonable" than the ECB?

The Federal Reserve's strategy currently seems to be to support the economic recovery, or the prospect of recovery in the future, by a slightly less expansionary monetary policy: slowdown in bond purchases, acceptance of slightly higher long-term interest rates. On the contrary, the ECB's strategy seems to be to maintain a very expansionary monetary policy, with large bond purchases and long-term interest rates remaining very negative in the core euro-zone countries. It is possible to defend the idea that the Federal Reserve's strategy is more "reasonable" than that of the ECB: it limits money creation and the expansion of asset price bubbles; it brings back a yield curve with a positive slope, which is positive for financial intermediaries and for the financing of the economy, while keeping long-term interest rates markedly lower than the growth rate.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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