The US Federal Reserve's
expected tightening of monetary policy later this year should be seen as a positive action, though there may be some turbulence in asset and foreign exchange markets.
Not exact matches
But AMRO said its outlook is not without risks as it warned
of the potential impact
of faster - than -
expected monetary policy tightening on global financial conditions, and escalation
of global trade tensions, on capital flows and borrowing costs.
The Bank
of Korea left its key interest rate unchanged on Tuesday, as
expected, taking note
of muted inflationary pressure and showing caution ahead
of any further
monetary tightening from the U.S Federal Reserve's
policy meeting on March 20 - 21.
The IMF said in October it
expected Canada to consider raising rates, or a «gradual
tightening»
of monetary policy, in late 2014.
The Peoples Bank
of China is
expected to carry on with enhancing liquidity fine - tuning while maintaining a
tightening bias in both
monetary and regulatory
policy, as long as growth continues to be more than 6.5 percent,...
Given the strength
of the US economy, the Federal Reserve has further
tightened monetary policy and financial markets
expect this to continue.
Strong U.S. economic data contributed to fears
of the Federal Reserve
tightening monetary policy faster than
expected have pushed investors to sell Treasurys recently.
Although bond yields have already started to rise in recent months in anticipation
of a reduction
of monetary stimulus in the US, we
expect future increases to be moderate in the face
of what is likely to be a gradual pace
of policy tightening by both the US and Canadian central banks.
We
expect that the currencies
of economies with relatively strong growth, where
policy is likely to be
tightened over the short term, should appreciate against the currencies
of the G - 3 (U.S. dollar, euro and Japanese yen), where
monetary policy is likely to remain loose over an extended period.»
If the Fed opts to broadcast a slow and small pace
of monetary policy tightening (one or two rate increases), Marks
expects the market will digest this well.
Rates on 30 - year fixed mortgages are
expected to jump to 5.4 % during the fourth quarter
of 2015, the National Association
of Realtors says, amid the expectation
of tightening monetary policy next year from the Federal Reserve.