Here's what one top economist sees ahead for the Fed and US-China trade (via CNBCFuturesNow)
"It's clear that all the major banks — the Federal Reserve, the ECB, the Bank of Japan — [are] all rowing in the same direction" when it comes to monetary policy, Steil said.
"The big difference at the moment is that the Federal Reserve is still comfortably in the territory of conventional monetary policy," he said. "[With] the ECB and the BOJ, in contrast, negative interest rates and quantitative easing [is] much more difficult territory to navigate." But while the Fed is unlikely to let U.S. rates dip into the red, more quantitative easing — the process of central banks buying assets from their domestic markets to spur economic activity — isn't off the table, Steil said.
"I don't think we're going to see negative rates as a policy tool. In fact, [Fed Chairman Jerome] Powell has poured cold water on that. But we could very well see more QE," he said. "The Fed clearly has no intention of resuming its balance sheet shrinking. I think Wall Street would welcome a foray into QE as long as they didn't see it as a sign that the Fed was predicting an imminent recession.
And, at the end of the day, the outlook on U.S.-China trade will be a huge determinant in what comes next, Steil said as he looked ahead to the next week of the United Nations General Assembly's 74th annual session., but there's that bigger issue that looms in the background: what is the future of U.S.-China relations?" he said.
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