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MACRO PERSPECTIVE : FED vs ECB : two divergent policies

17.04.2014

Monthly macroeconomics analysis by Philippe Waechter, Chief economist of Natixis Asset Management.

"2014 may well end up being summarized as having been an arm-wrestling match between Janet Yellen and Mario Draghi. Simply rereading the declarations of each would be sufficiently convincing of this. For the Chairperson of the Fed, the robustness of the American economy will lead to a reduction, meeting after meeting, of the volume of assets purchased. Then, next fall, when the number will have fallen to zero, the Fed will set a schedule (6 months?) to begin raising interest rates.


On this side of the Atlantic, the discourse is different. During the last monetary policy committee meeting, Council members unanimously considered that the ECB’s monetary policy was restrictive, even with a benchmark rate of 0.25%. Consequently, it was necessary to implement a more accommodating strategy."

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