Insightperspectives January 1, 2016 v3

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(the six-month-index is highly correlated with
the yield curve). A flattening yield curve is an
important factor in Insightperspectives'
on page 17, which assesses the US economy to be
"late-cycle" - see Insightperspectives’ “real time”
Euro-zone – ECB cuts policy rates; strong cyclical
tailwind is confronted by political headwind
On December 3, the
In
addition, the central bank said it intends to extend its
€60 billion per month bond buying program by another
six months until March 2017 "or beyond” (a promise to
provide liquidity for longer). The latter, however, is a
“free promise”; in early 2015, the US Federal Reserve
also promised to keep ultra-low interest rates in the
"foreseeable future" although this was replaced with a
rate hike in December – read more in the
The financial market, however, expected a far more
aggressive monetary move as the ECB was seen to put
its money where its mouth is by raising its bond buying
program. Instead, ECB president Draghi suffered a
crushing defeat in the Governing Council after over-
promising in the media.