Federal Reserve’s Possible Interest Rate Cut:
Gonzalo Canete emphasized that the US economy is growing at a strong rate, and the European economy is in an economic contraction. Despite this, Jerome Powell, the chairman of the Federal Reserve, had suggested the possibility of cutting interest rates in the next year, which caused an explosion of happiness in Wall Street. Canete suggests that the Federal Reserve may need to cut interest rates to support the global economy, especially since the European Central Bank may also need to consider reducing interest rates based on the Federal Reserve’s actions.
European Central Bank’s Balance Sheet Reduction:
Canete discussed the reduction in the Central Bank of Europe’s balance sheet, which will result in bonds being removed from circulation. Although this action may be seen as a contraction in monetary policies, it may actually be necessary to provide more liquidity to the market. The speaker noted that the Federal Reserve is currently facing a similar situation with the European Union and China experiencing slow growth and a risk of global recession, while the dollar also being the world currency.
Central Banks’ Role in Preventing Global Recession:
Canete suggests that Central Banks should activate stimulus or take other measures to prevent the global economy from shutting down. He believes that if the Federal Reserve continues to provide more liquidity to Wall Street, it may help the European market in surviving the current cycle.
Impact on the European Market:
Canete discussed the state of the European market and the potential impact of additional liquidity on it. He believes that if the Federal Reserve continues to provide more liquidity to Wall Street, it may help the European market in surviving the current cycle.
In conclusion, the video by Gonzalo Canete provides valuable insights into the current market situation and the potential actions that Central Banks may take to support the global economy. The possibility of interest rate cuts by the Federal Reserve and the European Central Bank’s balance sheet reduction may have a significant impact on the market. It is crucial for investors and market participants to stay informed and adapt to the changing market conditions.
About the Author:
Gonzalo Canete is a well-known financial analyst and speaker who provides daily market updates on his YouTube channel, ATFX Connect. He offers insights into market conditions, economic trends, and Central Banks’ actions. Canete encourages viewers to provide feedback through comments and subscribe for future content.