Sterne: Policy Divergence, Two-Way Risks in 2017

The transcript discusses the theme of divergence in central bank policies, particularly focusing on the Fed's rate hikes compared to other major banks like the ECB and BoJ. It explores the implications of a strong dollar on US trade and relations with China, highlighting potential tariffs and capital outflows. The conversation shifts to investor sentiment towards Trump's policies, noting a disconnect between market optimism and underlying risks. The discussion also covers market volatility, its impact on hedge funds, and the role of monetary policy and tapering by central banks.

What are the implications of the Fed's rate hikes on the Euro dollar?

How might the strong dollar affect the US trade balance?

What are the potential consequences of tariffs on US manufacturers and exporters?

In what ways could the disconnect between bond yields and monetary policy impact the markets?

What factors contribute to the uncertainty surrounding Trump's economic policies?

How does the ECB's approach to monetary policy differ from that of the Fed?

What are the expected GDP growth rates for Europe, and how do they compare to consensus?