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.
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.
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.
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.
Economist Luis Arroyo tells his colleagues not to feel outraged because the Federal Reserve’s latest monetary policies make an expansionary impact on European markets, too. It is unavoidable.