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Nouriel Roubini: Understanding the Fed’s dovish turn

The Fed has abruptly put further interest-rate hikes on hold, owing to key changes in macroeconomic conditions and the political environment

Federal Reserve Chairman Jerome Powell
Federal Reserve Chairman Jerome Powell Photo: Getty Images

The US Federal Reserve surprised markets recently with a large and unexpected policy change.

When the Federal Open Market Committee (FOMC) met in December 2018, it hiked the Fed’s policy rate to 2.25-2.5%, and signaled that it would raise the benchmark rate another three times, to 3%-3.25%, before stopping. It also signaled that it would continue to unwind its balance sheet of Treasury bonds and mortgage-backed securities indefinitely, by up to $50bn per month.

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JPMorgan Is Revamping Its Bank for the Superrich to Cater to Global ClienteleExternal link

JPMorgan Is Revamping Its Bank for the Superrich to Cater to Global Clientele