The value of global equities surged $6.5 trillion since mid-November, with the Standard & Poor’s 500 index reaching a five-year high. The Stoxx Europe 600 Index rose 12 percent since European Central Bank President Mario Draghi pledged July 26 to do “whatever it takes” to safeguard the monetary union.
Several policy makers said the Fed should be ready to vary the pace of monthly bond purchases, according to the minutes of the Federal Open Market Committee’s Jan. 29-30 meeting. They review the program March 19-20.
“The Fed is more tolerant of higher inflation outcomes in order to work on the other side of their mandate” to cut unemployment, Michael Pond, head of global inflation-linked research in New York at primary dealer Barclays Plc, said by phone on Feb. 21. “Inflation-linked securities offer very cheap insurance because if the Fed is going to get it wrong, they are going to get it wrong on the side of leaving accommodation longer rather than risking removing it too early.”