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| President Barack Obama confers with Federal Reserve Chairman Ben Bernanke following their meeting at the White House. (Photo credit: Wikipedia) |
From my estimation markets are drawing near to a key inflection point which could arrive as early as next week with any number of potential catalysts (FOMC announcement, Bernanke press conference, 1st quarter US GDP, the usual eurozone issues, etc.) serving to ignite outsized moves across markets. I don’t want to delve too deeply into the macro minutia of the moment, however, I believe it is worth saying a few words about the two most important institutions in global financial markets: The ECB and the Fed.
By most accounts both the ECB and Fed have managed to curb markets’ enthusiasm for additional policy easing, although the recent steep declines across commodities and pullback in equities signal that market participants may require another liquidity infusion sooner rather than later. The ECB in particular appears to be playing a dangerous high stakes game of chicken with markets as Spain, and in turn the European banking system, teeters on the brink of crisis. My good friend David Schawel published an important piece on the topic of “How Spain Pays the Piper” last week in which he offers a few different solutions... Continue to read.
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