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Borrowing costs could threaten US recovery and USD rally
There's an inconvenient truth, which is that many western countries are so heavily indebted that they cannot afford rising interest rates, yet that is exactly what is starting to happen in the US and long before the US Federal Reserve tighten official rates. Steadily rising interest rates should be supportive for USD as the Fed normalises its monetary policy. Yet the very process of winding down quantitative easing could be sowing the seeds for the next US economic downturn and a weaker USD. At Wednesday's FOMC Fed chairwoman Janet Yellen guided expectations on interest rates higher. They're now expected to be at ... (full story)