HSBC Says Fed Could `Change Course' on Balance Sheet in 2019

The transcript discusses concerns about potential Fed policy mistakes in 2019, the end of economic expansion, and the possibility of a recession. It highlights the Fed's patient approach to policy adjustments, including interest rate hikes and balance sheet management. The impact of these policies on markets, particularly emerging markets, is also examined, emphasizing the difficulty of isolating individual factors affecting financial conditions.

What is the main concern regarding the Fed's policy in 2019?

• An increase in inflation rates

• A decrease in global trade

• A rise in unemployment rates

• A potential policy mistake leading to a recession

How did the Fed signal their approach to policy changes in the recent rate hike?

• By increasing the rate significantly

• By announcing a halt to the balance sheet shrinkage

• By maintaining a gradual approach

• By setting a fixed policy for the year

What was the market's reaction to Fed Chair Powell's comments on the balance sheet?

• The market experienced a significant drop

• The market showed no reaction

• The market remained stable

• There was a material shift in markets

What challenge is highlighted in isolating factors affecting markets?

• The impact of oil prices

• The effect of the US dollar

• The difficulty in isolating individual factors

• The role of emerging markets

What might prompt the Fed to change its course regarding the balance sheet?

• A negative impact on financial markets

• A decrease in inflation

• A rise in unemployment

• An increase in global trade