“The Organization for Economic Cooperation and Development warned central banks that ending the global loose-money policies could result in much higher borrowing costs for governments.
“Exit from unconventional monetary policy, when needed, may be difficult to manage and less smooth than desirable, possibly leading to sharp rises in bond yields and serious negative consequences for growth in a number of advanced and emerging economies,” said OECD Chief Economist Pier Carlo Padoan. We think that the eurozone could consider more aggressive options. We could call it a eurozone-style QE.”
The rich-country group also cut its outlook for the US to 1.9% for this year, down from 2%. It expects global GDP to rise 3.1%, down from an earlier estimate of 3.4%. The eurozone is likely to shrink 0.6%, a more severe contraction than the 0.1% drop previously forecast.
Europe’s unelected executive body, the European Commission, is acknowledging that it’s unlikely that some countries meet their budget deficit targets, the Financial Times reports. The EC will emphasize structural reform and give Spain, France, and the Netherlands more time to lower deficits to 3% ….”Twitter