ROHR COMMENTARY Excerpt for MyTradingBuddy
Friday, September 4, 2015
Receding growth potential is far more apparent now.
European equities held up through the balance of the day on Thursday after the ECB signaled a potential for expanded Quantitative Easing (QE.) Yet the US equities lost their gains by the Close. This gets back to the implication we have noted for some time that QE cannot in and of itself return the world to the robust growth last experienced prior to the 2008-2009 financial crisis. This is part of what some describe as the markets “losing their faith in central banks.”
That is a silly notion. It is substantially based on Ben Bernanke expounding on the benefits of QE in his bid to popularize the Fed. Yet other central bankers have been far more aggressive in expressing the need for other measures. As we have noted for a while and saw once again on Thursday, ECB President Draghi was pointed on that key point:
Without structural reforms the current QE assisted cyclical recovery will not turn into the growth economy everyone is hoping it will become.
This content is restricted to site members. If you are an existing user, please log in. New users may register below for FREE.