Market To Remain Volatile Despite Fed Support Says IMF – Market News Store

Market To Remain Volatile Despite Fed Support Says IMF

David Lipton from IMF has told news agencies that markets are likely to remain volatile till some more time. Last year toward the holiday season markets witnessed strong sell offs due to escalation of trade war between US-China and doubts that Federal Reserve would increase interest rates again towards beginning of the year. Due to sluggish trade data and signs of inflation during 2019 Central banks re-evaluated their market strategies and policies and some of them undertook stimulation changes that encouraged share markets again as investors predicted that there would be long periods of inexpensive cash.

But during the Spring Meetings of IMF and World Bank at Washington DC, Lipton stated that though capital markets do take inspiration from activities of central banks but investors should not get carried away by accommodative attitude of banks. He told that in view of the delicately balanced condition of global growth the message from IMF to national policy makers was to do good without causing harm. He insisted that this message is applicable to all economies of the world to address Italy’s economic struggles, avoid trade battles, ensure smooth transition of Brexit and maintain smooth trade relations.

General Manager of Bank for International Settlements (BIS) has said early this week that asset prices are now valued fairly so central banks will not try to create any instability by adopting low rate environment. He also stated that market correction towards 2018 end had taken off fair bit of value from assets. As such it is the right time for central banks to take advantage of this region to consolidate its growth which would not affect financial stability. The BIS is a form of apex body and generally referred to as “bank of central banks’ as most central banks in the western world like BOE and Federal Reserve have their accounts in it.

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