Monetary Policy

16 August 2016

RBA Governor Stevens is Stepping Away after 10 Years

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 his...

9 August 2016

Bernanke’s Brookings Blogging is all about the Data

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. ...

4 August 2016

Today is the BOE’s Day to Surprise or Disappoint

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...

27 July 2016

The Fed, on Cue, Meets Expectations

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...

27 July 2016

Expressing the Fed’s Leadership through its Statement

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...

25 July 2016

Cause and Effect, and then there is Monetary Policy

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...

14 July 2016

Federal Reserve Decisions Effect on Emerging Markets

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...

14 July 2016

Post-BOE Meeting

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...

14 July 2016

Pre-BOE Meeting

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...

1 July 2016

BOE: Monetary Policy Talks in High Gear

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...

30 June 2016

Monetary Policy Action Confusion Spreads

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...

20 June 2016

St. Louis Fed President Bullard’s ‘Regimes’

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...