Global Central Bank Watch Policy divergence set to resume, but probably not until June It seems increasingly likely that the much anticipated Trump fiscal stimulus will not take place until later this year. But economic growth and headline inflation have both picked up in the US and... 27th February 2017 · 1 min read
Global Central Bank Watch Era of global QE not over yet The widespread pick-up in activity and rebound in inflation in advanced economies during recent months has reduced the pressure for central banks to ease policy further. But only in the US do we... 27th January 2017 · 1 min read
Global Central Bank Watch How will Trump’s victory affect global monetary policy? With President Trump set to implement a large fiscal stimulus next year, US inflation and interest rates will both rise more rapidly than seemed likely a month ago. This has already had knock-on... 30th November 2016 · 1 min read
Global Central Bank Watch Are political attacks on central banks just “noise”? Politicians have made increasingly strident attacks on central banks in many countries recently. But we doubt that these criticisms will lead to significant revisions to monetary policy regimes... 28th October 2016 · 1 min read
Global Central Bank Watch Are yield ceilings the future for monetary policy? The Bank of Japan’s decision last week to begin targeting long-term bond yields marks a major shift in the conduct of monetary policy and is the latest sign that central banks are worried about the... 30th September 2016 · 1 min read
Global Central Bank Watch Could policymakers cope with another downturn? Policymakers gathering in Jackson Hole last week highlighted that a fall in equilibrium real interest rates means that central banks may have little room to cut rates in the event of another recession... 1st September 2016 · 1 min read
Global Central Bank Watch Yet more policy easing to come We have scaled back our forecasts for rate hikes in the US, but still expect the Fed to raise interest rates further than is priced in by financial markets during the coming two years. At the same... 29th July 2016 · 1 min read
Global Central Bank Watch How much has “Brexit” changed prospects for monetary policy? In the immediate aftermath of the UK referendum, central bankers have concentrated on providing verbal reassurance, but they may soon back their words with action. We think the Bank of England will... 29th June 2016 · 1 min read
Global Central Bank Watch How will the UK referendum affect global monetary policy? A vote by the UK to leave the European Union would come as a major surprise and could trigger significant market turmoil. This would probably lead to the Bank of England keeping monetary policy looser... 25th May 2016 · 1 min read
Global Central Bank Watch What next for negative rates? Negative policy rates have come under attack in recent months, but most of the criticisms look overdone. We still think Japan will cut its policy rate further in June or July, while also stepping up... 28th April 2016 · 1 min read
Global Central Bank Watch What do tightening labour markets mean for monetary policy? Labour markets in all the major advanced economies have been tightening for several years, and in many cases they are now close to full employment. At face value this suggests that the world may be on... 24th March 2016 · 1 min read
Global Central Bank Watch Have central banks run out of ammunition? There is undoubtedly less scope for policy easing than there was a few years ago, but the charge that central banks are now powerless is, in our view, exaggerated. For a start, policymakers still have... 25th February 2016 · 1 min read
Global Central Bank Watch What does the market turmoil mean for monetary policy? The turmoil in global markets since the beginning of the year is not, in our view, a sign that the world economy is heading for a recession, but the fall in oil prices will have a knock-on effect on... 26th January 2016 · 1 min read
Global Central Bank Watch Global easing cycle not over, despite looming Fed hikes After many delays we think the US Fed will – finally – raise rates in December. However, the global easing cycle is likely to continue next year,for several reasons. Underlying inflation in Japan and... 26th November 2015 · 1 min read
Global Central Bank Watch A lot more easing to come The US Fed now looks likely to leave interest rates unchanged until next March before tightening policy more rapidly than the markets anticipate. Many other major central banks, meanwhile, are still... 28th October 2015 · 1 min read
Global Central Bank Watch How far will interest rates rise? The peak rate of interest in the next tightening cycle is likely to be lower than in the past. Indeed, we estimate that the so-called “neutral rate” is now only around 3% in the US and UK and... 28th September 2015 · 1 min read
