Chart of the month
Can the Fed keep interest rates at their historic low levels until 2015, as promised by Ben Bernanke? While sustained growth is eluding the UK and the eurozone, the US economy is displaying all the signs of a normal recovery from recession. In the six months to 3rd April 2013 the cash assets of US banks increased by $369.3b. (or by almost 23% and at a monthly average of over $60b.) The launch of QE3 in September 2012 has played a significant part in this, but now the recovery has built up a momentum that is reflected in both the housing market and the stock market. Broad money growth would be in the low to mid single digits without QE, so the continuation of such a loose monetary policy is not really necessary. In fact, circumstances may well force the Fed to raise interest rates in 2014.
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