Man Group said that if the bond market begins to question the independence of the next Federal Reserve chairperson, the central bank may have to resort to quantitative easing (QE) to reduce long-term borrowing costs.
Kristina Hooper, chief market strategist at Man Group, the world's largest listed hedge fund group, pointed out that investors need to look back at what happened in the UK in 2022, when traders dumped gilts due to a lack of confidence in the economic policies of then-Prime Minister Liz Truss.
In a LinkedIn post, Hooper wrote that Britain's borrowing costs have been higher than many other G7 economies ever since, a reminder that "the credibility of government officials is critical."
"If a Fed chair is elected who is perceived to lack independence and is focused on lowering long-end rates, I suspect he will have to resort to QE because that is the best chance of achieving that goal," she said.
Man Group: If the market doubts the new chairperson, the Federal Reserve may need to restart QE
2025-12-09 04:53:17
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