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Jakobsen: Negative interest rates could be Fed's choice

The dollar’s fallen significantly this week, after senior members of the Federal Reserve toned down their hawkish language about rate hikes this year. Saxo's Chief Economist, Steen Jakobsen thinks it's only a matter of time before they move to the downside in terms of what they do.

While the service side of the US economy is still strong, the industrial side is weak. So does Jakobsen believe there could be a return to quantitative easing? He doesn't think it's a priority. He does, however, believe that a move towards negative interest rates (like Japan, the ECB and so on) is.

On the plus side, Steen has been calling for a weaker dollar for some time - and now he's got it. The move brings with it a stabilisation to commodity prices which will boost exporters that are energy heavy, he predicts. If this continues over the next few weeks, it will result in better sentiment. The world is too dependent on the dollar, he concludes.

03:11 minutes
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