Financial Times – The US stimulus debate features two warring camps. The Obama administration insists that a failure to stimulate will open the door to a double-dip recession. Its foes retort that continued stimulus could scare investors into dumping US Treasuries. Team Obama invokes the recent run of poor economic data, which point to a risk of renewed slowdown. The critics recall that the Treasury market dipped unnervingly last year, and that foreign central banks were rumoured to be tired of funding US deficits.
Faced with finely balanced dilemmas, some Americans are wont to ask: “What would Jesus do?” In this case a variant may help: “What would hedge funds do?”