Deutsche Bank: Only the Fed can save the actions now – Magazine Saturday

Deutsche Bank: Only the Fed can save the actions now

The experts at Deutsche Bank believe that only a relief of monetary policy in the US can help global actions recover from the sharp correction that is to mark the year.

16:01 • Business

by Patricia Abreu – Business Journal

global equities pulled the year in sharp decline, dragged by fears about the economy and the low oil prices. And the selling pressure is far from over. A situation that is in the hands of the US Federal Reserve to change, argue strategists at Deutsche Bank.
Equity markets are being swept away by a jumble, with major global exchanges to mark significant declines in 2016. A scenario black which only the Fed can save, says Deutsche Bank. Because, according to the German bank, before the current crisis, only a change in US monetary policy may curb pessimism.
After several years with the interest rate unchanged in a range between zero and 0.25% the institution led by Janet Yellen rose for the first time in nearly a decade, the interest in the country in December. A move that should initiate a cycle of normalization of rates in the US.
“Without a monetary policy intervention is no greater loss potential for action”, anticipates a note from Deutsche Bank cited by CNBC. Experts emphasize also that “to prevent further rise of default in the US, we need to see probably a Fed slowing down, leading a sustainable dollar fall, higher oil prices and lower stress on the balance sheets of energy companies.”
the problem, says the bank, is that there are few signs that the Fed wants to change the course of its monetary policy. And the release of robust economic indicators, particularly in the labor market should give rise to the institution further interest increase plan in the country.
Disclosure of the Fed minutes for the meeting held on 26 and 27 January should give indications on monetary policy in the country, this after Yellen have recently admitted that “financial conditions in the uS are less favorable to growth”.

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