Extraordinary developments in 2014 - Leen's list
1. The European Central Bank introduced negative interest rates for the first time
2. The Federal Reserve in the United States finally started tapering off its quantitative easing (QE) programme
3. Geopolitical risks came to the fore again, including continued unrest in the Middle East and political tensions over Ukraine
4. Risk spreads for bonds issued by Southern European governments narrowed, reflecting an increase in investor confidence
5. Oil prices fell sharply, from over $100 a barrel to about $65 – a shift Leen says is likely to boost economic growth
What’s in store for 2015?
Leen says the Federal Reserve is likely to increase interest rates for the first time in nine years (monetary tightening), while the European Central Bank is expected to start quantitative easing (monetary easing).
“This divergence may lead to increased volatility on the financial markets, not least for the euro-dollar exchange rate,” he says. “Of course no one can know what next year will bring, but the global economy is likely to be shaped by many of the same issues – as well as a few unpredictable surprises.”