FastFt concur … “US budget deal should hearten Yellen”
Although acknowledging the need for the US to address the worrying trajectory of its debt over the long-term, chairman Ben Bernanke has consistently urged Congress to take care not to damage a recovery that has barely reached a 2 per cent pace over the last four years.
So those over at the Fed may take some comfort from the bipartisan deal that a US Congressional committee has just been reached.
- The number may not be big enough to sway the Fed on whether it starts to taper… when officials meet next week or in the first quarter of 2014.
- But … the Fed will surely be heartened by the rare display of bipartisanship in Congress
- This agreement will put off another scrap over the funding the government until 2015, but the battle over the US debt ceiling is still etched in the calendar for February
Should this deal herald a deeper thawing of divisions between Republicans and Democrats over fiscal policy, Janet Yellen could start as the next chair of the Fed with an unexpected tailwind in February.
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Earlier announcement: US budget deal: Ryan says agreement ensures no government shutdown in January, October 2014
