19 Jun 2014
No risk of a bubble, said the Fed - Societe Generale
FXStreet (Barcelona) - Sebastien Galy, Senior FX Strategist at Societe Generale, notes the Fed does not see risks of a bubble.
Key Quotes
"The Fed doesn't see the risk of a bubble based on standard equity metrics. Combine this and gloriously easy monetary conditions and the wonders of a new equity guidance may be an unexpected side effect."
"This is leaving some including myself with a sense of deep unease as we rush blindly forward into riskier assets. To generate a wealth effect would mean that consumers believe the gains to be permanent in the sense that we return to a pre crisis normal growth, there is little evidence of that, improving house prices matter far more."
Key Quotes
"The Fed doesn't see the risk of a bubble based on standard equity metrics. Combine this and gloriously easy monetary conditions and the wonders of a new equity guidance may be an unexpected side effect."
"This is leaving some including myself with a sense of deep unease as we rush blindly forward into riskier assets. To generate a wealth effect would mean that consumers believe the gains to be permanent in the sense that we return to a pre crisis normal growth, there is little evidence of that, improving house prices matter far more."