Presentation is loading. Please wait.

Presentation is loading. Please wait.

Quantitative Easing: A Global Perspective

Similar presentations


Presentation on theme: "Quantitative Easing: A Global Perspective"— Presentation transcript:

1 Quantitative Easing: A Global Perspective
Joseph Wolski , Vincent Paikowski, Erica Kilps

2 What is Quantitative Easing?
Quantitative easing is an unconventional monetary policy (change money supply) in which the central bank purchases government securities (T-bills and government bonds) from the market in order to lower interest rates and increase the money supply. A way of pumping money into the economy by purchasing your own debt.

3 Treasury Assets

4 Intentions and Risks Intentions were: Risks were: Increase employment
Encourage borrowing/lending (increasing bank reserves) Reduce interest rates Risks were: Increase inflation from the increased money supply Weakening of the U.S. dollar at home and abroad

5 Global Impacts Many countries around the world use the U.S. dollar as a backing of their currency. Many countries also peg their currency to the U.S. dollar. Any change in the U.S. dollar will have ripple effect around the world Any inflation in the U.S. dollar will cause it to be devalued in the global market

6 U.S. Stock Exchange and QE
Historical evidence suggests a positive correlation in the U.S. stocks and QE As of 2014, the U.S. was just under 40% of the global equities market. Global impact: because of interconnectivity of global markets and U.S. market share, there would have been massive global depreciation if QE was not implemented in the U.S.

7 Questions Given what has been stated, what do you believe are the risks that go along with QE? Greece has qualified for the European Central Bank's QE plan, would implementation assist Greece with economic stimulation if done? Does anyone have any questions or comments??

8 Works Cited By Varying the Forward-looking Language in This Statement, the FOMC Can Alter Business and Investor Views about Where Monetary Policy, and in Particular, the Federal Funds Rate, Is Likely Headed. This in Turn Affects Longer-term Interest Rates, as Investo. "Will Unconventional Policy Be the New Normal?" Federal Reserve Bank of San Francisco. N.p., 07 Oct Web. 22 Sept Ross, Sean. "How Does Quantitative Easing in the U.S. Affect Global Markets?"Investopedia. N.p., 04 Feb Web. 22 Sept Snyder, Michael. "The 9 Reasons Why Quantitative Easing Is Bad For The U.S. Economy." Business Insider. Business Insider, Inc, 05 Nov Web. 22 Sept Ross, Sean. "How Does Quantitative Easing in the U.S. Affect the Stock Market?" Investopedia. N.p., 10 Feb Web. 22 Sept "U.S. Equities’ Share Of Total Global Market Capitalization Is Growing." First Trust Portfolios L.P.•, 21 Oct. 14. Web.


Download ppt "Quantitative Easing: A Global Perspective"

Similar presentations


Ads by Google