Quantitative Easing

In another perfectly normal week, the Fed decided to end its QE program and BOJ to expand their version of QE. Who is right and who is wrong? And why? We combed through the web to find some answers for you.

We asked CFA Institute NewsBrief readers to comment on whether they believe central banks will be able to reduce their involvement in markets and let economies operate on their own.

We asked NewsBrief readers to share their views on the performance of Abenomics thus far. According to 613 respondents, 59% believe it's too early to judge its performance, whereas a quarter of respondents believe it's a failure.

The FT/IMF recently reported that more than 62% of foreign central banks' assets are denominated in US dollars, of which a significant portion is in US Treasuries.

At the recent CFA Institute India Investment Conference in Mumbai, attendees were presented with two very different perspectives on quantitative easing.

In a presentation at the India Investment Conference in Mumbai, the economist and strategist explained the real meaning of QE and its impact on the economy and financial markets.

When it comes to the dismal science, what happened this past year was not just a random series of events to commit to memory. It was a complex sequence of cause and effect, even when — in the immortal words of Frédéric Bastiat — the effects are unseen.

Governments traditionally have two policy levers to influence the economy: monetary policy and fiscal policy. Many investors have directed their ire at the unprecedented monetary easing of global central bankers over the last several years, but fiscal policy in both Europe and the United States has proven impotent because of unswerving gridlock. Now there is a potential reckoning for fiscal impotency in the form of a fixed debt ceiling in the United States.

All eyes will be on Federal Reserve Chairman Ben Bernanke at the upcoming Fed meetings September 17 and 18. Since the Fed first indicated interest in "tapering" off bond purchases in May, the US Treasury yield curve has shifted upward by more than 100 bps — increasing mortgage rates by a commensurate amount.

While it is true that the government interventions of the past few years indeed avoided a massive debt deflation cycle, it is also true the these interventions themselves are changing the fundamental structure of the economy, as well as the expectations of its participants.