FXStreet (Delhi) – Research Team at Societe Generale, suggests that the Fed has raised rates by a small amount (25bp) to a low level (25-50bp) but such a small policy change won’t derail the US economic recovery.
Key Quotes
“The threats facing the global economy and markets come from countries far, far away and are independent of what the Fed does. Can anyone else (Europe, Japan?) pick up the baton and drive global growth forwards? Can China manage modest currency depreciation without causing bigger shock waves? Can the global commodity boom/bubble that China inspired be deflated without devastating consequences across EM? Can the temptation to opt for devaluation as a short-term economic fix be resisted? There are so many risks, all of which could trigger capital flows into G3 currencies and which, ultimately, will send the dollar higher.”
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