The longer current monetary policy settings are in place, the greater the risk is of another crisis -- and both central banks and governments will be poorly placed to fight it.
In 2008, the GFC had an irrevocable impact on markets, but another event has been just as instrumental in reshaping the global economy.
For seven long years the Fed has aggressively defended a monetary policy regime explicitly designed to inflate the type of assets most likely to be concentrated in the hands of the wealthy. Despite the protestations of the man under whom these policies were implemented, the gap between the rich and everyone else has grown in post-crisis America. Show More Summary
The NYT had a bizarre front page article about the limited effectiveness of monetary policy in the euro zone and elsewhere. The headline of the piece refers to "trillions" of dollars being spent by central banks, a line repeated in the...Show More Summary
The Bank for International Settlements (what we might also call the central bank for central bankers) is worrying about the fact that interest rates are too low. Part of their worry might well be a reasonable one, that low interest rates for long periods of time do have the effect [...]
Here is a roundup of recent statements by top U.S. officials, including policy makers at the Fed, about international developments, how they might be felt in the U.S. and the implications for monetary policy.
By Lionel Laurent LONDON (Reuters) - Rising interest rates after years of loose monetary policy will pose a fresh risk to banks' ability to absorb losses using capital buffers, the Bank for International Settlements said in its annual report on Sunday. Show More Summary
Since the beginning of March when we first explained why QE (or at least some manner of “unconventional” monetary policy) may be inevitable in China, we’ve tracked developments around the country’s local government debt refi effort closely. Show More Summary
[youtube:zf00mEe9EOs] The Bank of Japan is basing its monetary policy on Peter Pan. The Financial Times reports that Governor Kuroda opened a recent conference by arguing that 'the power of conviction was among the best tools in a policy...Show More Summary
(June 24, 2015 01:41 PM, by Scott Sumner) Jose Romeu Robazzi recently left the following comment: "IMHO the disagreement between keynesians and monetarists remain the same: both schools identify AD shortfall as a problem, and both schools recommend some sort of intervention (e.g. wealth transfers to sustain AD):... (0 COMMENTS)
``... the world is entering a period of asynchronous monetary policy, with divergences between individual central banks which has the potential to destabilise the asset market... The crucial difference between the actions of individual central banks is that the European, Japanese and Chinese central banks cannot directly supply the dollars essential to global markets.''
The Swiss National Bank (SNB) continues to operate at the forefront of experimental monetary policy. Back in 2011, the SNB put a floor underneath EUR/CHF to prevent the ultra-strong Franc from exacerbating the deflationary forces plaguing Europe. The central bank’s balance sheet has grown 134% since then, which seems like [...]
I wrote about Rand Paul’s new tax-reform plan today at Bloomberg View. I like it much more than his old flat-tax plan, which raised taxes on a lot of middle-class people, especially parents. The new plan avoids large tax increases on...Show More Summary
Gold is getting crushed. On Monday morning, gold fell more than 1%, or about $15 an ounce, to around $11.86.70. It's now back below the key $1,200 level that it crossed last Thursday. After the Federal Reserve's monetary policy update...Show More Summary
Janet Yellen, the Chairman of the Federal Reserve, has been signaling to the financial markets that the Fed is going to raise rates towards the end of the year. If this happens, it will be the first time in nine years that the Fed has raised rates in the US. And it will be the […]
The Bank of Namibia just put out a great explainer on monetary policy that anybody can understand. On Wednesday, the Southern African country's central bank raised its benchmark repo rate 0.25% to 6.50%. And its biggest concern explains exactly why central banks raise rates. Show More Summary
The first Federal Reserve official to speak in the wake of this week's central bank monetary policy meeting said Friday he is still in favor of raising rates at some point this year.
Gold is on track for its second weekly rise aided by a softer dollar, the Greek debt debacle and the U.S. Federal Reserve chairperson, Janet Yellen’s, dovish comments from this week’s monetary policy statement. Gold in USD - 1 Week The Fed said yesterday that a rate hike would come only after further improvement in the U.S. Show More Summary
The Bank of Japan kept monetary policy steady on Friday. ||| Tokyo - The Bank of Japan kept monetary policy steady and maintained its upbeat assessment of the economy on Friday, signalling its conviction that inflation will hit its 2 percent target without additional monetary stimulus. Show More Summary
For the 2nd time in a month, China's Shanghai Composite entered a correction, plunging 10% from local highs as headlines of delayed IPOs and large-scale steel 'dumping' at a loss combined with global monetary policy fireworks and European event risks. Show More Summary