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: interest rates
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 […]
Dollar Relief in 2023
In 2022, a confluence of shocks reduced economic growth and simultaneously boosted inflation, causing investors to flee to dollar-denominated assets. Now, as fears about inflation and monetary policy begin to abate, the dollar should start to depreciate, adding a bright spot to the global growth outlook. Read More Here
Where Has All The Liquidity Gone?
After two years of quantitative easing, central banks have begun to shrink their balance sheets, and liquidity seems to have vanished in the space of just a few months – revealing acute financial-system vulnerabilities. Read More Here
Core Dangers For The Fed And China
Just as a fixation on core inflation can mislead central banks, as it has done with the US Federal Reserve, the power of a “core leader” like China’s Xi Jinping is a recipe for misdirected and ultimately unsustainable policy regimes. Read More Here
Yes, The US Economy Is Likely In Recession
The release of data showing that the US economy has contracted for two quarters in a row has triggered an intense semantic debate among economists, pundits, and political operatives. The Biden administration and many commentators are at pains to deny that the US is in a recession, but history is not on their side. Read […]
A Fine Balancing Act
With fiscal policy having gained fresh prominence, governments must carefully calibrate their policies in the pandemic’s aftermath. Read More Here
Federal Reserve Signals A Shift Away From Pandemic Support
Federal Reserve officials have indicated they expect to soon slow the asset purchases they have been using to support the U.S. economy and predicted they might raise interest rates next year. Read More Here
The Return Of Inflation?
Though they have received most of the attention, supply bottlenecks are hardly the only factor to consider when assessing the recent surge of inflation. Far more important are broader structural changes in the economy and the alarmingly complacent attitude of central banks. Read More Here
How Rising Interest Rates Could Affect Emerging Markets
Emerging and developing economies are viewing rising interest rates with trepidation. Most of them are facing a slower economic recovery than advanced economies because of longer waits for vaccines and limited space for their own fiscal stimulus. Now, capital inflows to emerging markets have shown signs of drying up. Read Here | IMF Blog
looking beyond borders 