Redwood: A spotlight on interest rates

COMMENT

Most times investors think the US is about to cut its programme of quantitative easing, or stop money printing altogether, there is a sell-off in the markets.

In China, every time the authorities send tough messages to the fringe financial institutions by lifting the short-term money rates, the share market takes it badly. Higher rates in the inflation-prone emerging market countries with balance of payments deficits is also bad news for their share markets. Is all this justified? In one sense, the possible ending of US quantitative easing should be good news. The US authorities will only do it if they think the recovery is strong enough to be self-sustaining without extra artificial stimulus. It could mean further price falls in bonds, wh...