The QE threat

Chris Dillow

Chris Dillow

The looming ending of the Federal Reserve's quantitative easing (QE) policy could be dangerous for bonds and equities, some economists believe. "Market participants seem to have become convinced that monetary conditions will remain very easy for a very long time," said Jaime Caruana, head of the Bank for International Settlements recently. "Such overconfidence is dangerous." And Hans Olson at Barclays adds that the normalisation of monetary policy will reveal "inevitable excesses" of speculation.

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