Federal Reserve

Monetary policy: the dam might leak

MADRID | By J.P. Marín Arrese | Christine Lagarde’s stern warning on potential problems ahead for emerging countries has been delivered in rather a blunt way: “even with the best of efforts the dam might leak”. At the annual Fed gathering in Wyoming she claimed “further lines of defence” were needed to address a financial crisis. The hike in interest rates following the prospect of a progressive tapering in asset purchases by the US, has induced a sharp reversal in fund flows between developed and emerging markets.


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Central banks and monetary belligerence

MADRID | All the “Great Depression” stories show how both the governments’ blindness and central banks made the crisis last longer. So it does makes sense that in the current crisis both governments and central banks have been active to take measures, although not necessarily successful and effective. However, the ECB has been less belligerent than other bankers and its members don’t hold homogeneous positions.




Playing God with the US economy

WASHINGTON | Two online games posted in two regional Federal Reserve’s banks (San Francisco and Atlanta) enable us to forecast that the extremely accommodative US monetary policy will continue for a long period of time.


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Draghi is a drag on Bernanke

The ability of central banks to raise investors’ confidence is wearing off. More so when the European Central Bank has become a liability for the US Federal Reserve.


US Federal Reserve’s historical decision

Mr Draghi, governor at the European Central Bank, should listen to his American colleague at the Federal Reserve. And follow suit by means of expnasionary monetary policies even if inflation reaches 4 percent.


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Bernanke despises inflation horror tales

Will inflation rise in the US? That is the expectation of investors. Is it due to the Federal Reserve’s monetary policy? You bet. But, economist Luis Arroyo concludes, eggs end up broken when making an omelette. Or when a central bank stimulates employment.