Nomura Sees Fed Announcing Balance Sheet Tapering Sept.

The transcript discusses the Federal Reserve's plans to taper its $4.5 trillion balance sheet, with expectations for an announcement in September and commencement in October. It highlights the potential market impact of quantitative tightening, especially in the context of the ECB's asset purchase tapering. The discussion also covers the US economic outlook, noting a mature growth cycle and tightening labor market, but with moderate wage growth. Financial conditions remain accommodative, with equity markets high and the US dollar weakening, reducing previous headwinds for the Fed.

When does Nomura expect the Federal Reserve to start physically tapering its balance sheet?

• November

• August

• September

• October

What is the expected impact of quantitative tightening on market liquidity?

• Liquidity will fluctuate

• Decrease in liquidity

• No change in liquidity

• Increase in liquidity

Which currency is expected to strengthen as a result of the current market environment?

• Yen

• Euro

• Pound

• US Dollar

How is the US economy described in terms of its growth cycle?

• Recession phase

• Mature cycle

• Stagnant

• Early stage

What factor previously held the Fed back from adding rate hikes?

• Weak labor market

• Strong dollar

• Low consumer confidence

• High inflation