After Abenomics, the name given to the economic policy led by the outgoing Prime Minister, Shinzo Abe, but which should be followed by his successor Yoshihide Suga, the financial world will today, or at least waits, to know the new orientations and developments of what it means changing the long-standing policy from 2% maximum inflation, to a rhetoric of 2% on average. For now, what the market expects is more of the same, low interest rates for a longer period and more liquidity, or its continuation with no term in sight, in the perspective that until inflation shows signs of life, the central bank will extend the impressive and unthinkable (a few years ago) support for the world’s largest economy.
Whatever this theme reveals above all, it is the importance that the FED will have in the economy and on Wall Street, not only with the maintenance of an indispensable status quo, but with its reinforcement, relegating government economic policies to the background, moreover, as has been happening in Europe, with the ECB being the firefighter for the lack of political measures to solve the problems, some chronic, of several bloc economies. This week we are going to assess whether the Bank of England will get caught up in the most relevant way if it wants to intervene preventively for the event of a tough Brexit, the most likely scenario at this stage.
Photo by Jennifer Bonauer.
