The US economy is virtually insulated from the turmoil in UK markets, the St. Louis, James Bullard, a day after the Bank of England (BoE) resumed bond buying in an emergency measure to protect pension funds from a partial collapse.
“We certainly saw some movement in US asset prices in response to this, but I think this is about UK (economic) policy,” Bullard said during a conference call with reporters.
“I don’t see it really affecting US inflation or real growth developments, so this is mostly about financial markets having to price in the volatility you’re seeing in the UK.”
The pound hit an all-time low of $1.0327 on Monday and British government bonds saw a fierce sell-off in response to tax cuts proposed by the government of new British Prime Minister Liz Truss.
The proposals, according to financial market professionals, further fuel inflation and put the country’s fiscal and monetary policies at odds.
The mixed signals have added another dose of volatility to global financial markets already grappling with interest rate hikes by the Federal Reserve, which has acted more quickly and may push interest rates higher than previously expected, and many other countries. running to follow suit.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
