While base rates
kept at or close to zero for almost seven years and three massive asset - buying programs by the Fed have undoubtedly helped stabilize the US (and world) economy during and after the recession that followed the
global financial crisis, the continuation of expansionary
monetary policies is now supporting a growing excess of
global liquidity that has been distorting the market signals sent by stock and bond prices and thus contributing to the growing volatility seen in recent weeks.
The United States, for example, can not be isolated from the rest of the world, if it is to
keep the dollar at the centre of the
global monetary policy.