Government Policy & Global Markets

October 24, 2012

Ronald Reagan famously quipped that, “the nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help’.” The humor of this remark, derives, of course, from the kernel of truth in it.
-Jeffrey L. Knight, head of global asset allocation, Putnam


Key Themes:

· Government policies now dominate market performance in both the United States and Europe.

· The Fed’s QE3 policy may be lifting inflation expectations, and the challenge of executing this program may cause volatility for stocks and bonds.

· The strength of the dollar may be the key factor in whether the global economy grows or slows.


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