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Greenspan Conundrum Risk Rising for Fed as BOJ, ECB Add Stimulus

The risk bond yields will fail to climb as the Federal Reserve increases its cash benchmark is rising, echoing the dilemma faced a decade ago by then Chairman Alan Greenspan, according to money manager QIC Ltd.

While the Fed is poised to tighten monetary policy, the Bank of Japan and the European Central Bank are creating ever more liquidity. That will enter the U.S. unless the lenders can steer improvement in consumer and business sentiment in their local economies to soak up the funds, said Matthew Peter, chief economist at the Brisbane, Australia-based fund manager, which oversees the equivalent of more than $60 billion.