Federal Reserve

Central Europe is monetary policy’s control test

8 Nov 2021

The Czech, Polish and Hungarian central banks are hiking interest rates, the traditional riposte to rising inflation. In contrast, peers in major economies are responding less aggressively to price pressures. That makes for an interesting experiment.

UK wades into central banks vs. markets fray

4 Nov 2021

Bank of England boss Andrew Bailey has a different mandate from Fed Chair Jay Powell. But his basic challenge is the same: persuading investors that interest rates won’t rise as much as they think next year. The Briton’s old-school inflation target makes his job harder.

Capital Calls: Microsoft’s buyback, Railway M&A

15 Sep 2021

Concise views on global finance: the software giant’s $60 bln stock repurchase plan is smaller than it sounds; meanwhile, a tangled takeover battle for train operator Kansas City Southern takes a messy new track.

Job market mismatches are a long-term headache

8 Sep 2021

There are more U.S. vacancies than unemployed people. The post-pandemic reopening is causing temporary staff shortages despite joblessness elsewhere. But it’s also a long-term trend that will pose a tricky problem for central bankers as unemployment and rising wages coincide.

Capital Calls: UK engineer bidding war, Inflation

11 Aug 2021

Concise views on global finance: U.S. aerospace group TransDigm tries to elbow out rival Parker-Hannifin with a $9.7 bln bid for Meggitt; predicting U.S. consumer prices is proving tricky.

Rush for inflation insurance hedges faith in Fed

5 Aug 2021

The price of 10-year inflation-linked U.S. debt keeps hitting new highs. This partly reflects how expensive normal Treasuries have become. It also suggests investors are worried that price pressures could last far longer than U.S. central bank boss Jerome Powell expects.

IMF skims over non-viral risks to global economy

27 Jul 2021

The emergence of new highly infectious Covid-19 variants could wipe about $4.5 trln off global GDP by 2025, the international lender warned. Its economic update pays less attention to policy missteps, market ructions, or more bankruptcies. Yet these also pose a threat to growth.

Biden could raise volume on Fed’s quiet message

14 Jul 2021

Even if Chair Jerome Powell keeps his role at the central bank, the U.S. president may choose as many as three of its seven governors. New picks are likely to exceed Powell’s expansive view of the Fed’s role. But its tools to tackle issues like inequality are limited.

Capital Calls: Disney hits two post-Covid targets

13 Jul 2021

Concise views on global finance: Netflix and the Mouse House have racked up 24 Emmy nominations each for “The Crown” and “The Mandalorian.” But Disney's "Black Widow" not only saw a stunning streaming debut but also topped the re-emerging theater box office.

What a bucket of chicken wings might tell the Fed

25 Jun 2021

U.S. poultry prices are on a tear. Wings are the priciest of all. There are reasons of supply, like feedstock inflation and labor shortages, and of demand. Some may be transitory, as the central bank hopes. But it’s more complex than just going back to pre-Covid times.

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.

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.

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.

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.

Capital Calls: SXSW

19 Apr 2021

Concise views on global finance: Rolling Stone publisher Penske Media is taking a 50% stake in hipster arts festival South By Southwest.

Jerome Powell’s tricky tightrope act begins

13 Apr 2021

U.S. consumer prices rose 2.6% in the year to March due to higher energy costs. The upswing may be brief and the Fed boss won’t rush to tighten policy. Still, inflation expectations are rising. If that continues, it will make his focus on jobs rather than prices hard to maintain.

Wall St may get greater of two bank capital evils

5 Apr 2021

Financial firms just lost a regulatory perk that had allowed them to guzzle Treasuries with abandon. They may yet get a reprieve since looser leverage limits help the central bank too. But if the Fed tightens other capital rules instead, lenders could be even worse off.

Powell’s inequality goals put him over his skis

17 Mar 2021

The Fed boss wants to close the racial employment gap that widened as a result of the pandemic. But helpful policies are outside of Powell’s mandate, and stimulus might actually exacerbate the problem. The consequence is the economy could overheat before the gap closes.