November 10, 2015 – The Financial Times blog published an editorial by SEP Senior Fellow Lorenzo Bini Smaghi, in which he discusses the latest Federal Open Market Committee minutes that suggest the first rate rise occurring in December 2015 (as opposed to the previously signaled early 2016). Given that macroeconomic and financial market data have not changed much since September, he posits that the European Central Bank’s announcement regarding quantitative easing might have influenced the decision. A US rate rise is expected to result in the dollar’s appreciation, and this effect will be even more pronounced if it occurred contemporaneously with ECB easing. By implementing such a policy before the ECB makes its move, the possibility remains open that the ECB will reconsider its policy, depending on how much the dollar’s appreciation effects the value of the euro.
- The full article is available from The Financial Times.