IMF warns against premature ECB-tightening
The International Monetary Fund has warned against the effects of reining back asset purchases by the European Central Bank, as the ‘Draghi put’ sees its fifth anniversary.
The International Monetary Fund has warned against the effects of reining back asset purchases by the European Central Bank, as the ‘Draghi put’ sees its fifth anniversary.
The lending organisation had strong words about difficulties in “critical areas”, while Rhodium Group warned that wealth management products are behind shadow financing that is driving “unsustainable” economic growth, creating conditions similar to those that led to the 2007-2008 global financial crisis.
The big shift from the growth style of investing into a value style has been played out a number of times, but there are reasons to believe it could be an unwise move this time around.
Advanced economies have become the net receiver of market shocks while China and other emerging markets have turned into the sources, according to an IMF working paper.
The IMF yesterday warned that a rise in interest rates by the Federal Reserve could lead to a new crisis, with a spike in bond yields and emerging market economies particularly badly hit. Most estimates of when the Fed will begin rate hiking, or ‘normalisation’ as it is often called, range from as early as…