Central Banks

Why 2021 is a sweet spot for economic policymakers

29 Jun 2021

Economies are rebounding, low interest rates mean debt service costs are at historical troughs, and finance ministers and central bankers are pulling in the same direction. But “Pandexit”, as a new BIS report calls it, will make officials’ jobs harder again after this year.

Review: Reining in the crypto-fanatics

25 Jun 2021

Ex-Swift executives Gottfried Leibbrandt and Natasha de Terán traverse the payments world in “The Pay Off”. Anecdotes and explanations lend pace and purpose. But despite warnings about central bank digital currencies and other novelties, they ask more questions than they answer.

Capital Calls: Infrastructure, Doximity, Deliveroo

24 Jun 2021

Concise views on global finance: President Biden’s $1 trln bipartisan plan for U.S. infrastructure is a feat of political engineering. Meanwhile, medical-themed social network Doximity finds riches in niches, and UK delivery outfit Deliveroo serves up a favorable court ruling.

The Exchange: Roger Ferguson talks monetary policy

22 Jun 2021

The former Fed vice chair and ex-TIAA CEO joins Swaha Pattanaik to discuss how the central bank is navigating economic recovery and price pressures. He also talks about whether corporate America is living up to its diversity pledges and suggests strategies to speed progress.

Fed’s goal is to see forest, not whipsawed trees

16 Jun 2021

The U.S. central bank’s sanguine attitude on inflation avoids getting lost in fickle data. Record lumber costs were a worry until they fell. Used cars may be next. The risk is the Fed misses signs of lasting price pressure. But it's still better to focus on the bigger picture.

Guest view: Warning signs of a “Volcker Moment”

14 Jun 2021

William Rhodes, officemate of the late former Fed chairman, reflects on what the central banker who slew the inflation monster of the 1970s would make of the monetary and fiscal stimulus being pumped into the economy – and inflating asset prices – in the post-Covid recovery.

Capital Calls: U.S. inflation, Big Tech’s ad gains

10 Jun 2021

Concise views on global finance: A 5% annual jump in U.S. consumer prices reflects warped comparisons; the prospects for U.S. advertising are getting hotter, and the largest Silicon Valley firms will be the beneficiaries.

Confusing U.S. labor signs augur uneven recovery

4 Jun 2021

The Dallas Fed thinks the jobs market is hot; the San Francisco branch says the opposite. Both are right. While the unemployment rate fell to 5.8% in May, it’s less rosy for women and people of color. The central bank needs to focus on the weakest link to fulfill economic goals.

Capital Calls: Turkish gas, Generali, Garuda

4 Jun 2021

Concise views on global finance: President Erdogan’s “good news” on hydrocarbons smells off; the Italian insurer’s 1.5 bln euro bid for NN Group’s asset management unit may trigger a shootout; the Indonesian flag carrier’s long struggle to avoid bankruptcy is coming to a head.

BlackRock may find Uncle Sam a tough customer

3 Jun 2021

The New York Fed’s decision to ask Larry Fink’s firm to help sell corporate bonds bought last year is logical. Yet BlackRock won’t get much reward for its patriotic duty. Having eschewed a competitive process, regulators may feel pressure to show they’re not playing favorites.

Jay Powell’s oil price bet counts on green inertia

3 Jun 2021

The Fed boss and his peers expect rebounding energy costs will only temporarily lift inflation. But if Western oil majors cut capex to please investors, crude could grow more expensive in coming years. Rate-setters are implicitly banking on a more gradual eco-friendly shift.

Capital Calls: Uber union

26 May 2021

Concise views on global finance: UK union’s success in representing drivers may hit potholes in the United States.

Inflation scaremongering is overdone

19 May 2021

Company earnings have revealed rising prices, and U.S. inflation in the year to April was the highest since 2008. Economist Larry Summers has criticized the Fed’s view that the spike is transitory. But bond markets, closer to the central bank’s camp, may well be on the money.

Workers get the whip hand in economic policymaking

19 May 2021

New Zealand will cut low-skilled migration, U.S. President Joe Biden is hiking the minimum wage for federal contractors, and rate-setters everywhere are giving labour markets time to tighten. Such measures will help push up pay. Expect profit margins to fall or prices to rise.

Fed fuzziness stores up problem for global markets

18 May 2021

U.S. rate setters say they’ll act if inflation stays too high for too long. What that means in practice is anyone’s guess, going by economists’ divergent views. Fudged guidance buys time for economic recovery to take hold. Asset prices could be jolted when clarity finally comes.

Three scarcities make Jay Powell’s life harder

12 May 2021

U.S. inflation soared to 4.2% in April due to pricier raw materials and shortages of some goods. The Fed boss plans to ignore what he views as a short-lived phenomenon. It will only be transient if companies can find and retain workers more easily than is currently the case.

Chancellor: Digital currencies are no “stablecoin”

11 May 2021

If the early history of paper money is any guide, a digital currency sanctioned by central banks is likely at first to prove a force for higher inflation and other economic woes. Over time, however, it should take hold, rendering bitcoin and other crypto variants redundant.

Review: A better way of valuing the world

6 May 2021

The pandemic is one of three crises that Mark Carney dissects to show how market prices can fail, to society’s detriment. He suggests solutions in “Value(s)”. Better still, the former central banker is trying to practice what he preaches with his work on climate change.

Chancellor: Central bank coin will crush the banks

4 May 2021

To battle cryptos, digital money created by monetary authorities must protect individual liberties while minimising the state’s role in credit allocation. Doing that without disrupting commercial banking and the dollar’s hegemony will be a tall order for Powell, Lagarde and Co.

Fed’s Jay Powell picks the road less travelled

27 Apr 2021

The American and Canadian economies are both rebounding. Yet the U.S. central bank boss isn’t about to copy Canada’s bond purchase taper. It’s the difference between traditional and new-school monetary policy, which waits to see sustained inflation rather than anticipating it.