The US economy has been on a roller coaster despite the decent performance in 2014. Recently, analysts were focused on good timing of the possible key interest rate hike. At present, experts have raised the issue about a looming quantitative easing program. As a main excuse, supporters of the QE4 appeal to the latest report on the labor market. By the way, the US jobs market has never revealed sound results. While market participants were vigorously speculating on when exactly the US Federal Reserve would lift the federal funds rate, the US currency was notably gaining in value. As a result, the inflated US dollar has turned into a drag on both the local economy and the global economy as a whole. It is unfolding in the background of a large-scale capital flight out of emerging markets that considerably shrinks the US dollar supply in the global financial system. So the American currency is returning home. The consequence of such money rechanneling is similar to tightening the monetary policy. Pundits are fully aware that raising interest rates under the current conditions can pose a threat due to a variety of reasons. “The US Fed could raise the funds rate in a similar fashion as Allan Greenspan did, in particular to tackle the stock market bubble. Though, there are a few other reasons. We should not rule out the scenario that eventually more dollars will have to be injected into the economy. In principle, there are reasonable grounds for launching a new quantitative easing program if the US economy comes to a halt,” analyst Grigoriy Beglaryan made a comment.
