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Opinion

America will bounce back

I am convinced that the outcome of the human tragedy of September 11 will be a gutsy renewal of solidarity and confidence, recently lacking in the US, on the part of Americans and foreigners.


       

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A return to normal is part of defying this evil. On September 17 the US Federal Reserve responded by cutting interest rates by 50 basis points, to make 350bp of cuts so far this year. The same day the New York Stock Exchange reopened after an unprecedented post-war four-day closure. The European Central Bank and other central banks followed the Fed's rate-cutting lead.


On a broader front, US defence policy will be redefined to address the changed nature of war, and public spending will increase. This will have a beneficial fiscal impact on the US economy.


So I'm sticking my neck out and forecasting that global equity markets will move sharply up between now and the end of the year.




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