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She's no rebel, Yellen; we want more
Janet Yellen, the presumed next Chair of the US Federal Reserve, told Congress Thursday that there was more work to do and the American economy was falling far short of its true potential. That is as maybe, according to Saxo Private Bank's Chief Investment Officer. But Teis Knuthsen says there's a need right now for a change of tack from the Fed and it's time to taper its bond buying programme now.
Teis points out that at the current rate, the Fed will soon be the sole buyer of new government bonds. He says that was never the intention of QE3 and that the world has moved on and so should US monetary policy.
Teis says Yellen is determined to get unemployment down but she'll try to do it by using forward guidance to make sure interest rates don't move. Tapering, he says, will have to start soon but by promising that rates will be kept low for a very long time it should ensure we don't see the kind of panic we did in the summer.
01:47 minutes
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