Why the markets were wrong to be surprised by YellenLea Jakobiak
Global markets were taken by surprise by the Fed's Janet Yellen on Wednesday when she suggested US interest rates could rise in six months' time. They shouldn't have been, according to Saxo Bank's Head of Macro Strategy, Mads Koefoed.
As expected, the Fed announced another USD 10 billion reduction in its monthly bond purchases, It was the right call, says Mads. There's some speculation, however, that Yellen "mis-spoke".
He says the decision to taper is correct and that he's agrees that recent weak data was simply due to bad weather. He believes the US economy will accelerate for the rest of the year and there wasn't a lot of "new news" in what Yellen had to say.