After a long period of resistance, it appears that the European Central
Bank is finally going to follow the U.S. and Japan by starting a
government bond-buying program to try to light a fire under a eurozone
economy that is edging ever closer to deflation.
Earnings season got off to a promising start this week when aluminum
producer Alcoa reported revenue and profits for the fourth quarter of
2014 that were well above what the market was looking for. But that
positive momentum ebbed a bit when the first big banks announced mixed
results for the period.
To support the economic recovery, the Federal Reserve will likely
maintain its “lower for longer” approach to interest rates in 2015.
There are few signs of an inflationary buildup that would push the Fed
toward sharp rate hikes.