Global Times | 2013-9-17 21:53:01
By Nouriel Roubini
During the height of the Iraq war, then-US Secretary of Defense Donald
Rumsfeld spoke of "known unknowns" - foreseeable risks whose realization
is uncertain. Today, the global economy is facing many known unknowns,
most of which stem from policy uncertainty.
In the US, three
sources of policy uncertainty will come to a head this autumn. For
starters, it remains unclear whether the Federal Reserve will begin to
"taper" its open-ended quantitative easing (QE) in September or later,
how fast it will reduce its purchases of long-term assets, and when and
how fast it will start to raise interest rates from their current zero
level. There is also the question of who will succeed Ben Bernanke as
Fed Chairman. Finally, yet another partisan struggle over America's debt
ceiling could increase the risk of a government shutdown if the
Republican-controlled House of Representatives and President Barack
Obama and his Democratic allies cannot agree on a budget.
The
first two sources of uncertainty have already affected markets. The rise
in US long-term interest rates - from a low of 1.6 percent in May to
recent peaks above 2.9 percent - has been driven by fears that the Fed
will taper QE too soon and too fast, and by uncertainty surrounding
Bernanke's successor.
Read More : http://www.globaltimes.cn/content/812189.shtml#.UjiOvz-rI7s