Quantitative tightening: what will be its impact in 2010?

The big story of 2009 was quantitative easing; the big story of 2010 will be quantitative tightening.

There are two big questions for investment managers. When will it happen? And what will be the impact? In our view there is little doubt that quantitative tightening will begin this year. In fact, it has already started in some economies.  We have been monitoring, collecting and analysing liquidity data for over 25 years – our monthly databases cover some 80 countries and extend back to the early 1960s. The lessons we have learned from that data we apply to our own funds. They could make a significant difference to investment outcomes in the coming months. Quantitative easing (QE...