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KEIC Macroecon Team 2 – US QE Revision and Prediction

Abstract:

US has implemented Quantitative Easing (QE) since the Global Financial Crisis in 2008. QE is a very conventional tool that is used to treat the economic confidence during the period of crisis and not many countries have implied in history. In this paper we will study and examine the effects of US QEs in the US market. This paper believes thasome macroeconomic figures of US is promising that could push the Federal Reserve Bank (The Fed) to hike the interest rate in six months.. However, since some other core economic figures such as increasing government expenditure, household debt level and participation rates are not favourable towards US economy. Also, global economic interdependence and economic slowdown in US’s main trade partners such as EU and China is likely to affect negative effect on US market. From these reasons, the Fed is likely to delay the base rate increase. Moreover, we expect the Fed to increase the rate gradually from March 2016 since the Fed historically increased its rate in January to March than in December for past 25 years. We have retrieved the raw data from Federal Reserve Economic Data (FRED) and Reuters and processed it to our analysis.

Team 2 – 1:

• Changhwan, Charlie, Shin (chshin.kt@gmail.com)
• Yongmin, Jayden, Kim
• Seung Tak, Steven, Lee