Global Central Bank Watch Gauging the economic effects of banking turmoil Central banks are now in a more difficult position, weighing persistently high inflation on the one hand against strains in the banking sector on the other. For now, they are separating the two by... 5th April 2023 · 15 mins read
Global Central Bank Watch What to make of the latest forward guidance Now that inflation has passed its peak and many central banks have begun to slow the pace of policy tightening, markets are back to scouring their communications for evidence of what’s to come. So far... 8th February 2023 · 14 mins read
Global Central Bank Watch The signs of shifting cycles In recent weeks, attention has shifted from the likely size of rates hikes towards the timing of peaks and the prospect of ultimate cuts. History can tell us little about the likely profile since no... 10th November 2022 · 12 mins read
Global Central Bank Watch Multiple challenges raise risk of policy errors Recent developments have made a bad situation worse for central banks and what was already a challenging environment has become even more challenging. Not only is inflation proving more persistent... 4th October 2022 · 12 mins read
Global Central Bank Watch Will frontloading make hard landings less likely? The pace of policy tightening has increased still further, with many central bankers arguing that rate hikes must be “frontloaded” to tackle inflation risks quickly. In the current environment, this... 4th August 2022 · 10 mins read
Global Central Bank Watch Slamming on the brakes It’s been a momentous few weeks in the world of central banking. Persistent price pressures have prompted a hawkish shift almost across the board and we now anticipate the most aggressive and... 22nd June 2022 · 9 mins read
Global Central Bank Watch Balance sheet policy set to diverge The focus of recent weeks has been on the pace and synchronisation of interest rate hikes, with almost all major central banks now engaged or set to engage in tightening cycles and many taking an... 18th May 2022 · 12 mins read
Global Central Bank Watch Tightening risks recession but inaction would be worse The war in Ukraine has worsened the dilemma for the world’s major central banks: on the one hand it will push inflation even higher, but on the other it has raised the downside risks to real activity... 23rd March 2022 · 11 mins read
Global Central Bank Watch Hiking like it’s 1994? Monetary policymakers are under pressure, with inflation historically high and acute shortages threatening to boost price pressures further still. Accordingly, there is a risk that some central banks... 10th February 2022 · 10 mins read
Global Central Bank Watch A hawkish pivot With underlying inflation set to stay uncomfortably high for at least the next six months, we expect most central banks to continue or begin raising interest rates next year. But in some cases... 21st December 2021 · 6 mins read
Global Central Bank Watch Rate hikes brought forward, but end point still low There has been a hawkish shift among many of the world’s central banks over recent weeks as inflation has continued to surprise on the upside. In this Global Central Bank Watch, we assess the reasons... 29th September 2021 · 15 mins read
Global Central Bank Watch How will central banks respond to the inflation threat? The rise in inflation and the question of how central banks will respond has dominated headlines over recent weeks. In this Global Central Bank Watch, we set out a framework for thinking about how the... 30th June 2021 · 16 mins read
Global Central Bank Watch Central bank mission creep There have been several cases of central bank mission creep in recent months, with policy remits widening to cover areas other than consumer price inflation. The Bank of England is now helping to... 29th March 2021 · 15 mins read
Global Central Bank Watch Taper talk a prelude to bigger policy debate Talk of tapering in recent weeks has been premature and we suspect that most major central banks will keep up asset purchases at their current pace for the rest of the year. Assuming that tapering... 4th February 2021 · 15 mins read
Global Central Bank Watch Vaccines won’t preclude looser policy The encouraging news about vaccines has led us to expect most restrictions in advanced economies to be removed by Q2 next year, allowing them to embark on steeper recoveries towards their pre-virus... 25th November 2020 · 15 mins read
Global Central Bank Watch Average inflation targets from a global perspective For the past thirty years the orthodoxy has been that central banks should focus on controlling inflation, targeting a rate (normally 2%) over a key policy horizon (often 18 months to two years ahead)... 9th September 2020 · 13 mins read
