central banks

Sintra BCE

Lagarde, Powell, Bailey agree central banks are data dependent

Bankinter | After the monetary policy panel with Lagarde (ECB), Powell (Fed), Bailey (BoE) and Ueda (BoJ), the messages of the last meetings were maintained, as expected. Lagarde, Powell and Bailey recalled that central banks are data dependent, that they take decisions “meeting by meeting” and that their work is not yet finished. Lagarde referred to a hike in July as quite likely, but did not give any guidelines for…

ECB meetings

What To Expect From Central Banks In 2022?

Mark Holman (Vontobel AM) | The Fed’s QE programme of $80bn in Treasuries and $40bn of mortgage-backed securities (MBS) purchases per month is already being tapered with $10bn less in Treasuries and $5bn less in MBS as each month passes. In our opinion the Fed should have already finished tapering by now, but they have only just begun and at a very slow pace, suggesting it will take seven further policy meetings to complete.

ECB's president Christine Lagarde

The ECB’s Holistic Approach

Laura Becerra (Caixabank Research) | If we want to get a better understanding of monetary policy decision-making, we must pay close attention to changes in financial conditions. To do this, there is an important initial step: knowing how to measure them.

ECB Bundesbank

Central Bank Independence: From The Theory To The Practice

Javier García Arenas and Adrià Morron Salmeron (CaixaBank ) | The independence of central banks seems indisputable, even more so in these times of pandemic, in which they have increased their use of unconventional policies and provided coverage for the high funding needs of states. In this article we will explore the theory and empirical evidence supporting the importance for central banks to maintain their independence.

Fed's inflation target

Central Banks Will Not Regain Their Inflation Targets In The Next Three Years

Central banks have once again received criticism for the support they have provided to markets-to-date and their role as inflation targeters. Analysts at AXA IM’s view is that much of this criticism is misplaced: They expect central banks to remain inflation targeters, even though seeing the immediate pandemic impact as likely disinflationary through 2022. 

ECB meetings

Is There A Limit To Central Bank Intervention?

Alphavalue | The answer to this complex question is yes. Our analysts believe there is a limit to central bank intervention. This is not determined by economic or financial rules, but by politics. Ignoring that limit would violate democracy. The next question is: have some central banks already crossed the limit?

fiscal easing

$15 Billion In Stimuli For A V-Shaped Recovery

Frenzied rate cuts (more than a hundred worldwide) and liquidity injections by various central banks, amounting to more than $6 trillion, added to the fiscal stimuli of all kinds already committed for another $9 trillion. An unprecedented aid package that amounts to 19% of the world’s GDP in 2019. All aimed at trying to achieve a V-shaped recovery that will mitigate the effects (-5% of world GDP) of such an unexpected recession.

central banks1

G7, Central Banks To The Rescue Of Coronavirus Damage On The Economy

Expectations for coordinated action from the main central banks is growing. The Fed’s messages will be particularly decisive as “it is the only with real capacity to influence the market and the determination to take strong action”, explain experts at Bankinter. The upcoming central banks’ planned meetings are: March 12 (ECB), March 18, the Federal Reserve (FOMC Minutes), March 19, the Bank of Japan and March 26, The Bank of England.  

Fiat Money

Fiat Money Will Most Likely Continue To Lose Its Purchasing Power Over Time

Degussa | Wherever you look: Prices for consumer goods, real estate, stocks and bonds are on the rise. That means that the purchasing power of money is on the decline. For if, say, stock prices go up, your money unit can buy fewer stocks. What it also means is: While people holding assets, whose prices increase, become “richer”, people holding money get “poorer”


The Cost Of Negative Rates: The Case Of The Riksbank

Caixabank Research | The experience of the Riksbank highlights the doubts over negative interest rates: despite a worsening economic outlook for Sweden, it raised the interest rate from –0.25% to 0% in December and abandoned its policy of negative rates.