20 May 2011
In addition to it, in the nearest future we may see the so called oil shock. According to Tal, every oil shock for the last 40 years was followed by the recession. In other words, the next year may show an economic slowdown.
Benjamin Tal said there are some signs of it even now with tapped-out government budgets and a double-dipping U.S. housing market.
So he doesn’t expect an economic recovery in the U.S. for at least a year. Today the Fed pays much attention to its weak labour market, and it’s possible that there won’t be any rate hike in the next 12 months.
Speaking about the Bank of Canada, Benjamin Tal believes rate hikes will be very gradual at least until the Fed starts tightening.