FXStreet (Guatemala) - Gustavo Reis, Global Economist at Bank of America Merrill Lynch explained that The Federal Reserve and the Bank of England are heading to the exits.

Key Quotes

"The Federal Reserve and the Bank of England are heading to the exits, eyeing interest rate hikes in the not-too-distant future. And while the BoE seems closer to rates liftoff than the Fed-a reflection of the sustained growth pickup in the UK over the past year-the ongoing strengthening in the US economy suggests the Fed will soon face similar challenges."

"To be sure, there are limits to central banking analogies. Policy outlooks in the US and the UK reflect different economic structures, shocks and reaction functions. There are common themes, however, in the latter two categories."

"On the shocks front, both the US and UK economies are still recovering from financial crises and a productivity slowdown. These shocks increased the uncertainty about the supply side and the associated degree of slack."

"Meanwhile, both central banks have been struggling to communicate their post-crisis reaction functions, particularly with regard to financial stability. The riddles are not the same, but there is much to elicit empathy from both sides of the Atlantic."

Related Articles
  1. Forex Education

    Four Currencies Under the Spotlight in 2016

    With currencies having become the “tail that wags the dog,” in terms of their impact on the global economy, these four currencies will be under the spotlight in 2016.
  2. Forex Fundamentals

    These Currencies Are The Biggest Losers Of The Stock Downturn

    Here’s a list of the hardest-hit currencies amid the global stock market mayhem.
  3. Forex Strategies

    Will the Euro Continue to Rally? (EUO)

    The euro is rallying. Should investors chase this performance or is the real opportunity on the other side of the trade?
  4. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  5. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  6. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  7. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  8. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  9. Investing

    Financial News Comparison: Bloomberg Vs. Reuters (BAC, GOOG)

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  10. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
Trading Center