Clues to the current market turmoil can be found in the Scottish referendum, the Ebola outbreak, and a set of seventeen dots. The last of these are the “dots diagrams” that the US Federal Reserve uses to illustrate where its officials think interest rates will be in the future. They provide a glimpse inside the decision-making process of the main monetary control room in the world. And the picture that emerges is, frankly, terrifying. Fed officials currently believe that US interest rates at the end of next year could be anywhere between 0pc and 3pc. Opinions diverge even more for the end of 2016; the officials think that rates could be anywhere between 0.25pc and 4.25pc. In other words, Fed officials have almost no clue at all where interest rate for the world’s largest economy will be in 15 months time. And these are the people who are supposed to be setting it. If they’re confused, what hope do the rest of us have? telegraph.co.uk/finance/markets/11168470/Terrifying-US-cluelessness-on-interest-rates-suggests-politics-is-powerless.html
Posted on: Fri, 17 Oct 2014 08:03:05 +0000