The recent Republicans' victory in the US midterm Congressional elections and the Federal Reserve’s proposed quantitative easing policy QE2 are the most significant events that could influence the trends of global economy and stability of the financial markets. Fiscal policy makers intend to reduce budget spending, promote efficient governance and resist increasing taxes. However, measures that are dedicated to recover the current US economy by reducing the national debt and stimulation of business development are implementing together with financial markets destabilisation monetary policy as purchase of $600 billion in long-term (7- to 10-year maturity) U.S. debt will increase liquidity, keep low long term interest rates, depress the dollar’s international value, raise the price of commodities and shares. These opposite outcomes of the political decisions raise the following question: how two independent fiscal and monetary decision making powers of the world’s largest economy country match the common goals to recover stability of the national and global economy?
About Me
- Asta Pravilonytė
- Every manager can call him or herself a good strategist if he or she only works within an environment that is favorable; however, it is only in times of stress that one truly learns what one's capabilities are!
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