Italy’s Political Drama May Change Plot For Fed, ECB

Investing.com – The political uncertainty in Italy means short-term volatility for world markets, but analysts say it may wind up influencing the policies of the Federal Reserve and European Central Bank in the coming months.
The early view is that both central banks may be less aggressive in tightening monetary policy.
Until recent events, the Fed was widely expected to raise interest rates two more times in 2018, with some economists forecasting three rate hikes.
Now economists are saying the central bank will raise rates in June and then take a wait and see approach about further moves, with a hike in September now less certain.
Economists say the European Central Bank may also want to keep its options open.The ECB had been expected to announce the end of its bond buying program as early as this summer. That could be postponed if policymakers want to keep monetary conditions as supportive as possible.

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