Monetary Policy

It is not a good day for the US dollar.  It is being sold across the board.  The seemingly dovish FOMC minutes released late yesterday appears to have gotten the ball rolling.  The takeaway for many was that any officials...

  On September 18 2016, Glenn Stevens will end his ten-year mandate as governor of the Reserve Bank of Australia (RBA). His experience in the top job provides a wealth of lessons for the next generation of policymakers; that’s arguably...

Former Fed Chair Bernanke keeps a blog at Brookings.  His latest post offers insight into how to think about Federal Reserve, and in particular, Fed officials' understanding of the US economy.  Former Fed Chair Bernanke keeps a blog at Brookings. ...

Sterling has slumped two cents in the wake of the Bank of England's announcement.  It cut the base rate 25 bp and announced a resumption of its asset purchase program.  It will buy GBP60 bln of Gilts and added corporate...

The Bank of England owns today, though tomorrow will be about the US jobs report. The BOE disappointed the market last month by not immediately responding to the UK referendum.  It had laid out a somber economic and financial scenario...

The Federal Reserve met market expectations fully.  It upgraded its assessment of the economy, recognized that the near-term risks had diminished, and remained committed to normalizing monetary policy.  There was one dissent from the steady stance, and it the KC...

The Federal Reserve's two-day meeting concludes today.  There is little doubt that it will stand pat.  There is not press conference afterward, so the statement is the only thing investors will get.  The statement is important.  We argue that the...

Contrary to conventional wisdom, we think monetary policy remains an important variable for asset prices. Interest rates and foreign exchange are two dimensions of the price of money.  There is a relationship, even if it is not linear or temporally...

Draghi said nothing that surprised the market.  He acknowledged the resilience of the markets in the aftermath of the UK referendum.  He also noted that with new staff forecasts, next September, and the upcoming data, the ECB would be in...

If the United States Federal Reserve tightens or eases monetary conditions, this impacts emerging economies. Over the years since the global financial crisis, a second type of spillover has emerged: spillovers stemming from the uncertainty about future monetary policy. Uncertainty...

The Bank of England surprised many, if not most, participants by not changing policy.  There was no rate cut and no asset purchase plan. However, there can be little doubt that the BOE will take action next month.  The minutes...

After a nearly three weeks of turmoil following the UK referendum, there is now a sense of order returning to UK politics.  Two elements of the new government are particularly relevant.  First, May demonstrates strategic prowess by putting those like...

Investors are debating over whether the Bank of England ease policy at the July 14 MPC meeting or wait until August Quarterly Inflation Report when new post-Brexit forecasts will be ready.  There are many dimensions to monetary policy, and the...

The global capital markets have quieted considerably since the start of the week.  Month and quarter-end considerations appear to be playing a role.  In addition, there is a sense it will take some time to sort things out. The global...

The dot plot the recent FOMC meeting was curious.  We noted right away that inexplicably there was one official that apparently anticipated one hike this year and then no hikes in 2017 or 2018.  There was also one dot that...