Forget the Fed Taper, Here's Why the Global Liquidity Party Is Set to Intensify
- Buying by European, Japanese central banks seen offsetting Fed
- Bank reserves as percentage of bond stock is bullish signal
Morgan Stanley's Zentner Sees Three Fed Hikes in 2018
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The Federal Reserve’s plan to pare its $4.5 trillion balance sheet elicited barely a whimper in markets when it was announced last week, widely seen as a testament to the well-choreographed nature of the move. JPMorgan Chase & Co. has another read.
Research from Nikolaos Panigirtzoglou, a global market strategist at the bank, suggests the benign reaction is because there will be plenty of central bank cash floating around even as the Fed pulls back.