monetary policy

In the next series of blog posts, we will look in more detail at fiscal and monetary operations of a nation with a sovereign currency. Before we do that, let us briefly examine the case of the Euro. Let me say that we will not address the…

There is a road open for China involving controlled inflation that would lead to re-balancing, both domestically and internationally, which has some uncertainties. These must be compared to those of sustaining the export-led growth model,…

In the EMEA space, central banks from Czech Republic, Hungary, South Africa, and Turkey all meet next week. We don’t see any change from these four central banks and in general we believe EM central banks have moved into dovish wait-and-see…

The Fed feels politically constrained due to its own machinations in the past and the likelihood it will engage in a muscular easing policy if and when the US economy double dips. It does not want to come under attack for this Euro bank…

Central banks are taking on quasi-fiscal roles because the fiscal agent is lacking as in Europe or is unwilling to take bold steps toward a permanent solution to a systemic problem. What we need is ring fencing of core deposit-taking…

European stocks rally for a fourth day ahead of outcome from ECOFIN meeting; US futures tread lower. Coordinated policy action good step; further support for EFSF/Greece needed to hold momentum. CNY continues to be used by Beijing as a tool…

Today’s announcement that the ECB has coordinated with the Fed to give unlimited US dollar access to European banks through year-end was taken positively by markets. The euro strengthened and equities rallied. Clearly, this was something…

It remains my position that Congress should not allow the Fed to lend unsecured to foreign central banks without specific Congressional approval. But the Fed does currently have that authority and they are again using it to keep $ LIBOR…

A statement by the Bank of England on market liquidity to be provided in co-ordination with other major international central banks.

The European Central Bank was once known for its focus on price stability. Since the global economic crisis, however, its role has extended to saving banks and sovereign countries. This column argues that such a move has badly harmed the…