Reuters - Video

Edition: US | UK | IN | CN | JP

Finance Videos

Breakingviews: Fed honeymoon may be brief

Friday, September 14, 2012 - 03:24

Sept. 14 - The flood of cheap dollars from the Fed will lift all boats for a while. But QE is sure to trouble non-U.S. central bankers say Breakingviews.

▲ Hide Transcript

View Transcript

The Fed's aggressive stimulus announced yesterday may keep all -- hoping for a while. Bubble trouble non US central bankers with me now to discuss the estonians like there's breaking news economics editor Edward had us. And what some like all market set -- -- -- -- today thanks to Ben Bernanke but you're a urging caution lines that year we feel. That this is a move that's very oriented towards domestic US policy. And that very soon the markets we get -- there are X exuberance in the start to worry about. He effect it's gonna have and the dollar it's gonna push it down. And the fact that it's gonna have on commodity prices which will push up. And that those two effects are going to be very very negative for emerging markets -- of the policy does -- the last -- -- which is not have a lot of effect domestically but actually mess around with -- financial -- I was. As you say if this if this actually because she's done the -- tragedies and already -- -- on this and he's a five yeah I -- investors would be pushed towards -- Odd they might cute bit if what they're gonna find is that the emerging markets are themselves vulnerable. If you start to you have any kind. Disorder in the financial markets on. Help side. And then of course is a possibility that -- work in the US economy starts to grow and will pull money out of there. Says in a sense. You what you're gonna start to see is once high inflation and emerging markets. I'm on the other side the US economy will bring investors this means that the the emerging markets right now exuberance but they really do you become quite vulnerable that's we've seen the last few times it could in. Quantity easing in this time probably the bad news -- faster because. People are more used to it and they start to recognize the signs the telltale signs. Inflationary pressure so is is is the big. What if you animal. For investors and is inflation mean I mean you saw yesterday. Bus in Central -- -- assault without. Exactly these emerging markets where inflation is not under and anywhere near the same kind of control that is to say the low that is in the US and Europe. And there really much more edgy about that the danger there and and that means that their policies are going to be much more constrained. What comes days well asset classes and then on jamarcus feel -- -- to be most concerned about that if you you always wanna say this the most extreme risk cases are the ones you wanna worry about some of the countries that -- -- current account deficits that need. Need international financing think of India right at the top of the list maybe Turkey. Our countries where you would think that a change in investor sentiments can be acutely. Alarming. And -- of course the -- I guess as we discussed if this policy what's and you ask rule is on that the world economy comes by and I jamarcus. I get out of this mess which it then that's a -- then you probably wanna look towards China which is your your. Ultimate success story emerging markets on and where people are most worried about the export economy. Okay at -- thank you very much that's open vote. My thanks to -- -- how to ask for more financial insight what's -- US sticking issue every day at twelfth at the east and seventeenth FT PST. I'm Jamie gave up this have brought to --

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Breakingviews: Fed honeymoon may be brief

Friday, September 14, 2012 - 03:24