monetary policy

The central banks in Sweden and Germany are concerned about overheating economies as the European sovereign debt crisis has led to a net inflow of investment into their housing sectors. If one looks at European economic policy, these…

Long-term interest rates may have bottomed several months ago, but rate will remain low for several more months. For good reason, many observers and investors are concerned that the dysfunctional political system in the US will renew the…

A last minute deal was struck that re-opens the US federal government and removes the immediate threat of default, but rather than turn the attention from the US, the focus has shifted from fiscal policy to monetary policy. In particular,…

The Federal Open Market Committee has used various forms of forward guidance to influence the views of businesses, investors and households about where monetary policy is likely to be headed. This column by the President of the San…

QE is still on, but central banks are pondering exit pathways. Exit requires vacuuming up excess reserves, winding down massive securities holdings, and restoring normal interest rates – all without killing the recovery. This column points…

The Bank of Japan was able to lower Japanese government bond yields after an unexpected spike earlier this year (see post). The 10yr JGB is now yielding around 70bp, corresponding to about minus one percent of real yield.

Last week in the lead up to the FOMC meeting, I went through why I believed this meeting would mark a shift away from the QE regime. And while the Fed did not taper, indeed we are seeing a greater emphasis on forward guidance as a policy…

To put it mildly, the Fed’s dovish surprise has many implications for the market. The first is that the Fed is very concerned about the backup in US rates, and the negative impact on the economy. - The second major implication is that…

The Federal Reserve meets today and tomorrow to decide on the next step on monetary policy. In my view, this meeting is crucially important because it not only will mark a regime shift away from quantitative easing toward forward guidance,…

US President Barack Obama is in his second term in office. And because he cannot run for office again, his decision-making is bound to be different this term than it was in the first term. We are now seeing that in Syria, regarding the NSA…