monetary policy


Central banks do not do miracles

Fernando Fernández (IEAF) | Perhaps the moment has arrived to abandon the temptation to arbitrate, to recover humility and discuss what should be the aim of monetary policy.


Portuguese real estate has recovered remarkablyrecovery.

Real estate sector: Monetary policy and bond IRR could boost investment flows

Morgan Stanley | As we indicated in our last real estate strategy report, this has been the worst sector in Europe in 2Q19 (oversold and with a relative performance of 3.5sd below its 12MA). This has been mainly motivated by concerns about the proposal to freeze rental prices in the city of Berlin (and its possible spread to other cities in the country) as well as the uncertainty regarding Brexit. 


Are there limits to the monetary policy

Rethinking the limits of monetary policy

José Ramón Díez Guijarro (Bankia Estudios) | In recent years there has been a debate in academic circles about the limits of monetary policy, once the barrier of negative interest rates has been crossed. With the additional problem that not even in Japan, where the natural interest rate has spent practically two decades in negative territory, has the central bank dared to dive deep into the zone of below zero interest rates, even though the economy has been stuck in a deflationary stagnation which has given birth to new economic jargon (japanisation) to refer to this type of economic process. The doubt is whether the Bank of Spain got is wrong by not using monetary policy more intensively or got it right be assessing the risks of traveling in this unknown territory as greater than the possible benefits.




The negative yield curve and its consequences

Miguel Navascués | Recently, in the US, long term interest rates have fallen below short term rates. This has a more concrete significance: the economy is getting weaker and could enter recession. Something unusual has happened which we must explain.

 


ECB

EZ: When Greece financed itself cheaper than the US

Ignacio de la Torre | The ECB’s deposit rate, which is now at -0.4%, will move to -0.2% during 2019 and later to 0%. At the same time, during the second half of 2019 the logical thing is for the ECB to begin to raise interest rates. These two factors should fuel a progressive rise in the Euribor from the summer of next year.



European economic growth

Europe: Out Of The Laboratory, Back To The Labyrinth

BoAML | The ECB has closed many doors in December. The 2015-16 strategy of monetary policy covering for fiscal loosening to facilitate structural reform has changed.We are back to national governments having to navigate through strained fiscal trajectories, leaving very little room for mistakes. Potential growth prospects are not great, not only in the periphery.