Economic Affairs

No reason to fear the Fed

Rate hikes are far away and worries about tapering are premature

Long-term deflationary forces and the global pandemic situation are factors that should lead to further rounds of stimulus by the Fed rather than a pullback, says the author.PHOTO: REUTERS

Last Wednesday, the United States Federal Reserve spooked financial markets by subtly signalling that interest rate hikes could come sooner than it had earlier anticipated.

Equity markets fell everywhere, gold and other commodities softened, US bond yields rose and the US dollar spiked.

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