In something of a surprise to the consensus view, last week’s RBA September meeting flagged a tapering of bond purchases.
Forseeing a sharp economic rebound once NSW and VIC begin to exit lockdowns, with its base case being positive economic growth in Q421 and solid growth through next year, the RBA believes emergency policy settings can be phased out gradually.
Just a week earlier, at its US Jackson Hole conference, the US Fed hinted at a likely tapering of its bond purchasing program before year-end, although it left the exact timing open-ended. So, what exactly are the implications of a winding down of QE and will it spell trouble for the stock market? In this week’s asset allocation report we look at:
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