Todd Mattina, Chief Economist and Strategist on the Mackenzie Asset Allocation Team, appeared on Bloomberg TV Canada to discuss what could be expected from the Fed in coming months given its downgraded long-term economic outlook. He also talks about concerns regarding the Fed’s potency in fighting the next recession, the need for more growth-friendly fiscal policy and the challenge in Japan of lifting growth and inflation.
Outlook for the Fed
Todd Mattina’s interview with Bloomberg TV Canada on August 25, 2016.
- While conditions are in place for a Fed rate hike in September, it is likely the Fed will hold off until December.
- Central banks have carried too much of the load in terms of stabilizing the business cycle. Governments with high budget deficits and high debt can still engineer more growth-friendly fiscal policies.
- Japanese policymakers are hitting the wall when it comes to breaking the negative spiral of debt and deflation and may have to consider other tools like helicopter money.