IMF’s Lagarde Warns Central Banks About Ending QE Too Soon

The head of the International Monetary Fund has warned central banks not to end their stimulus measures too soon.

Christine Lagarde said stimulus policies were still needed in some regions, especially Europe and Japan.

With signs that the global economy is improving, there has been much debate about when supportive policies should be wound down.

But, in a speech in the US, Ms Lagarde said she did not suggest a “rush to the exit” as some economies remain fragile.

The US Federal Reserve has signalled it may slow down its huge monthly bond buying programme, a suggestion that has hit stock markets and currencies around the world.

But Ms Lagarde said stimulative measures had been successful and were still necessary in key economies.

Any withdrawal should be determined by the strength of individual economies, she said.

“Unconventional monetary policy is still needed in all places it is being used, albeit longer for some than for others,” Ms Lagarde said in her speech to a conference in Jackson Hole, Wyoming.

She said finance officials should prepare contingency plans in case market turbulence worsened.

via BBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza