monetary policy

In the World 10th December 2024

China to adopt ‘moderately loose’ monetary policy in 2025 to support economic growth

Bankinter: China is to adopt a “moderately loose/lax ’ monetary policy in 2025 to support economic growth. This is the first strategic shift in monetary policy since 2010 towards a ‘prudent’ monetary policy. In addition, the Politburo announces the implementation of more proactive fiscal policies, in order to ‘vigorously’ boost consumption and expand domestic demand in ‘all directions’. Opinion of Bankinter’s analysis team: The Chinese government has five fixed monetary…

European economy 28th November 2024

EC says euro area fiscal stance to be 0.29% of GDP tighter in 2025 than in 2024

Norbolsa: EU fiscal plan: The European Commission reported that France’s 2025 draft budget and medium-term plan to reduce public debt are in line with EU rules (it is projected to have a budget deficit of 6.1% of GDP this year and by 2025 aims to reduce it to 4% and then bring it below the EU limit of 3% in 2029), while the Netherlands’ spending plans are high. The European…

Jerome Powell delivered an upbeat appraisal of the US economy

World economy 27th March 2024

March madness in global monetary policy

Benoit Anne (MFS Investment Management) | Last week, we witnessed some rather unusual activity among major central banks. Indeed, one central bank—the Swiss National Bank—delivered a rate cut, while another—the Bank of Japan—announced a rate hike. Sightings of unsynchronized monetary policy actions at the major central bank level are less frequent than sightings of UFOs in New Mexico. Not only that, but we are starting to get the sense of…

Relevant News Item 1st June 2023

Eurozone M3 monetary aggregate grows by 1.9% in April, lowest reading since July 2014

According to data from the European Central Bank (ECB), the monetary aggregate M3 in the Eurozone grew by 1.9% year-on-year in April (+2.5% in March) to €16.03 trillion. The reading, which was the lowest since July 2014, was slightly below the 2.0% growth rate expected by FactSet consensus analysts. The ECB also published that bank lending to eurozone households rose by 2.5% year-on-year in April to €6.87 trillion, marking the…

European economy 2nd February 2023

ECB hikes policy rates by 50bp

Annalisa Piazza (MFS Investment Management) | The ECB hiked policy rates by 50bp and pre-committed to hike by another 50bp in March. The depo rate now stands at 2.50%. Looking ahead, the ECB is widely committed to keep rates in restrictive territory to reach the inflation target in the medium term. The overall communication by the ECB remains relatively hawkish as the policy stance remains restrictive. That said, the market…

European economy 23rd January 2023

Lagarde insists “staying the course” is her monetary policy mantra

Link Securities | European Central Bank (ECB) President Christine Lagarde said on Friday that “staying the course” is her mantra on monetary policy and urged central banks around the world to do the same to achieve output recovery. Lagarde described 2022 as “a strange, strange year” as the low growth figures seen in the world’s largest economies were “not usual”. However, she expressed hope that “cooperatives, consumers, and state policymakers…

World economy 13th January 2023

Japan: The beginning of the end of the BoJ’s Yield Curve Control

Alicia García Herrero (Natixis) | Financial markets were caught off guard when the Bank of Japan (BoJ) adjusted its monetary policy on December 20th, 2022. The Bank decided to lift the ceiling on the 10-year JGB yield to 0.5% from 0.25% under the yield control (YCC). One interesting point to make is that the BoJ did not take the decision against the wall. In fact, the upward pressure on the…

World economy 22nd December 2022

Uncertainty over monetary tightening hurts the economy

Juan Pedro Marín-Arrese | The Fed is running out of munition after raising its rates substantially. The narrowing margin forces it to slow down monetary tightening. Keeping unabated its previous speed would wreak havoc on the economy. Yet, Jay Powell countered any hope of further softening by delivering a relentless hawkish message at the latest press meeting that plunged stocks into utter disarray. Powell made it crystal clear at Jackon…

European economy 15th December 2022

The ECB is committed to continue to increase rates significantly

Annalisa Piazza (MFS Investment Management) | The ECB is committed to continue to increase rates significantly, at a steady pace and to keep rates in restrictive territory until the medium inflation target returns to target. The central bank announced that it will start quantitative tightening (QT) related to the APP at the beginning of March 2023, with a “measured and predictable pace”, allowing the Eurosystem balance sheet to decline by…

Jerome Powell baffled both the experts and the markets

World economy 22nd September 2022

Is Powell Ready To Do Whatever It Takes?

J.P. Marín-Arrese | While markets mildly reacted to the widely discounted rate hike and the prospect of protracted high-interest levels, the stern message delivered by Jerome Powell unsettled them. Stocks tumbled as he emphasised the Fed’s commitment to tighten its policy as long as inflation remains unabated, flying high above its 2% medium-term target. In short, he sounded ready to do ‘whatever it takes’ to curb the current price spiral….

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