21 Mar 2014
Fed on track for eventual policy normalization - Societe Generale
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale, notes that the Federal Reserve continues to lay the groundwork for an eventual normalisation of monetary policy.
Key Quotes
"The Federal Reserve continues to lay the groundwork for an eventual normalisation of monetary policy, which will in turn help to unwind the dollar’s under-valuation and the extreme over-valuation of some currencies."
"Super-easy policy has helped the world recover from the great recession but an addiction to cheap money is evident in house price inflation in the UK or Australia, in overvalued currencies in Russia and Brazil and in overpopulated ‘carry’ trades in the Chinese RMB. Orderly normalisation will provide support for the dollar, while a disorderly move that spooks asset markets would trigger a sharper move. So far, so good and the move is set to remain slow."
Key Quotes
"The Federal Reserve continues to lay the groundwork for an eventual normalisation of monetary policy, which will in turn help to unwind the dollar’s under-valuation and the extreme over-valuation of some currencies."
"Super-easy policy has helped the world recover from the great recession but an addiction to cheap money is evident in house price inflation in the UK or Australia, in overvalued currencies in Russia and Brazil and in overpopulated ‘carry’ trades in the Chinese RMB. Orderly normalisation will provide support for the dollar, while a disorderly move that spooks asset markets would trigger a sharper move. So far, so good and the move is set to remain slow."