Fed Will Use MAP To ‘Thread The Needle’: RBS

This week’s Federal Open Market Committee meeting didn’t have any big surprises, but that also means it has yet to find an answer to analysts who worry that the country is falling into a QE trap where market reactions prevent the Fed from ever really ending accommodative policies. It’s not that the Fed doesn’t realize its attentiveness to market reactions creates moral hazard, but ignoring the market entirely could easily throw the recovery off track. A shift to macro-prudential policy measures (MAP) could be a way to get out of this mess, and John Briggs, Head of Cross Asset Strategy and Head of Asset Backed Product Strategy for RBS, argues that it may already be underway.