Why Interest Rates Matter
The Federal Reserve’s primary economic policy tool is also a macro-signal of the economy’s health. Read More Here
Tag: banking
The New Normal for Central Banks
The US Federal Reserve and the European Central Bank have made clear that they intend to roll back quantitative easing by reducing their bond holdings. But the other driver of central banks’ balance-sheet expansion for the past 15 years – the provision of abundant reserves to the financial sector – remains up for debate. Read […]
Why Are Stocks Soaring In The Middle Of A Pandemic?
The contrast seems grotesque. A deadly pandemic has shut down the global economy and left millions of workers furloughed, fired, or stranded without gigs. The future for most businesses looks uncertain to dismal. Yet U.S. stock indices are near all-time highs, at giddy valuations comparable to the 2000 dot-com bubble and 1929. Read Here – […]
Why Financial Markets’ New Exuberance Is Irrational
Owing to a recent easing of both Sino-American tensions and monetary policies, many investors seem to be betting on another era of expansion for the global economy. But they would do well to remember that the fundamental risks to growth remain, and are actually getting worse. Read Here – Project Syndicate
Why China Isn’t Cutting Lending Rates Like The Rest Of The World
China’s central bank must manage an economy structured in many ways quite differently from that of other major regions, such as Japan or the European Union. But the PBoC faces the same question of how effective monetary policy can be today. That has significant implications for the central bank’s signalling, which appeared to take a […]
The Anatomy Of The Coming Recession
Unlike the 2008 global financial crisis, which was mostly a large negative aggregate demand shock, the next recession is likely to be caused by permanent negative supply shocks from the Sino-American trade and technology war. And trying to undo the damage through never-ending monetary and fiscal stimulus will not be an option. Read Here – […]
Europe’s Dream: Escaping The Dictatorship Of The Dollar
Trump’s hostile behaviour is reinvigorating efforts to turn the euro into an alternative to the world’s dominant currency. If only the Europeans could find some way to do it. Read Here – Foreign Policy
How Inflation Could Return
After years of low inflation, investors and policymakers have settled into a cyclical mindset that assumes advanced economies are simply suffering from insufficient aggregate demand. But they are ignoring structural factors at their peril. Read Here – Project Syndicate
Desperate Chinese Middle Class Take Big Risks To Move Money, And Themselves, Overseas
A growing number of Chinese have rushed to obtain long-stay visas or property in friendly foreign countries as an insurance policy against a worsening of domestic conditions. Spurred on by a lack of investment options at home and rattled by the sweeping anti-corruption campaign of President Xi Jinping, those with significant assets are looking for […]
How The Next Downturn Will Surprise Us
Over the past decade, the world’s largest central banks — in the United States, Europe, China and Japan — have expanded their balance sheets from less than $5 trillion to more than $17 trillion in an effort to promote the recovery. Much of that newly printed money has found its way into the financial markets, where […]
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