The aftermath of unorthodox monetary policy

Have the Federal Reserve’s unorthodox policy measures done more harm than good? Paul Grillo, co-chief investment officer, points out several complications that have been set in motion by the central bank’s actions.

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many Economist in Market participants are wondering if the recent tightening of monetary conditions by the FED is has been a policy era I believe that the policy ever really was the unorthodox monetary conditions that the FED gave us with quantitative easing to quantitative easing 3 and the twist those moves took pressure's off politicians to enact will reform they encourage the expansion of debt in the global system beyond what we had in the global financial crisis they also moved asset prices Beyond fundamentals and we're now seeing corrections to that whole environment right now so if the FED had not given us those unorthodox monetary conditions we would not have a reversal of Mark it's like we're seeing now and we would have a smoother transition into the monetary tightening the Federal Reserve is giving us one move of policy rates of 25 basis points the markets and reaction to this have given us much more of a monetary tightening or a tightening of financial conditions we seen risk premium expand across many sectors of the markets it's now hitting corporations and entities with higher borrowing costs the economy will soon start to feel these higher risk premiums and borrowing costs across many of these entities and you'll see a step down and global economic activity that means that the FED will probably be unable to raise rates further in the future and may have to give us a loosening of monetary conditions as we go forward

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