Monetary Policy

Dixon: No escape from debtors’ prison for Greece

11 Sep 2017

Alexis Tsipras is desperate to avoid surveillance of his actions by the country’s creditors when its third bailout ends next August. The best the Greek prime minister can hope for is to move from a high-security unit to an open prison – and only if he behaves.

Review: Bank of England’s present echoes in past

8 Sep 2017

The Old Lady has evolved from government lender to modern central bank, but familiar themes recur in David Kynaston’s vivid history. Arguments over independence, monetary policy, bank bailouts and the City of London’s future are as timeworn as the institution itself.

5-Star’s softer stance on euro is clever tactic

4 Sep 2017

The radical Italian party sees a referendum on euro membership as a last resort, one of its top lawmakers says. The apparent U-turn could help soothe markets and business before upcoming elections. There’s room to backtrack, but 5-Star is holding up and getting more nuanced.

Yellen sets out her stall for Trump

25 Aug 2017

In what may be her last Jackson Hole set piece, the Fed chair defended tighter regulation since the crisis 10 years ago and called for continued U.S. leadership in global forums. The president wants to unwind the reforms. It's a factor as he considers whether to reappoint Yellen.

How the Bank of Japan can keep the money flowing

25 Aug 2017

The disappearance of inflation is the big debate for central bankers in Jackson Hole this weekend. That puts Japan in an uncomfortable spotlight. The BOJ is running short of government bonds to buy - but could do more by becoming more creative in its asset purchases.

Central bank confab may be calm before the storm

24 Aug 2017

With the U.S. and global economies in good shape, Yellen can enjoy what may be her last show in Jackson Hole. But fiscal fights in Congress, Fed bond sales and doubts about her future loom. The ECB nears its own taper even as low inflation confounds. Gray clouds are moving in.

ECB weakens Italy doom loop by bending bond rules

16 Aug 2017

The European Central Bank is buying more Italian bonds than its rules allow. That helps lower the country’s borrowing costs and allows its banks to cut exposure to their sovereign. With elections and political risks looming, it may have to take an ever more pragmatic approach.

Euro rally will only speed its own reversal

21 Jul 2017

The single currency has hit a two-year high against the U.S. dollar. That will depress import prices when inflation is still too low. Any hint that a stronger exchange rate will prompt the European Central Bank to leave monetary policy loose for longer will push it down again.

Central banks have no choice but to keep the faith

20 Jul 2017

ECB chief Mario Draghi and Bank of Japan boss Haruhiko Kuroda have spent trillions of euros and yen without generating much inflation. Nor is it clear when a pick-up in growth will feed through into prices. Yet they are obliged to insist their policies will work eventually.

Canada treads a fine line in following the Fed

12 Jul 2017

The central bank raised its key interest rate for the first time in nearly seven years, saying growth looked healthy. Inflation remains below target, though, and a housing bubble threatens to deflate. It's hard for Canada not to match tighter U.S. policy, but it carries risks.

Only in Trumpland is Gary Cohn suitable Fed chair

12 Jul 2017

The former Goldmanite and White House adviser is tipped as top contender to replace Janet Yellen. Though not an economist, his years in finance put him ahead of other cabinet picks lacking relevant résumés. But a Wall Street trader's temperament is no match for the staid job.

Bank of England puts price on bond fund stupidity

12 Jul 2017

Regulators worry that the growth of open-ended bond funds could cause fire sales. A central bank paper estimates that could add nearly half a percentage point to companies’ funding costs. Pointy-headed analysis should reinforce the case for more sensible investment models.

Cool credit markets could be own undoing

10 Jul 2017

Corporate bonds shrugged off the recent “taper tantrum” that hit government debt and equities. Investors may be betting that central banks will only slowly tighten policy, supporting demand for riskier assets. Yet unruffled markets may only hasten policymakers’ rush for the exit.

Bank of Japan can hold out as Western yields rise

7 Jul 2017

The central bank underlined its determination to keep 10-year yields close to zero by offering to buy unlimited bonds. The BOJ has the tools, market dominance and motivation to hold firm. Tighter policy in the West should help Japan by weakening the yen and importing inflation.

Blueprint for UK finance free trade has many holes

6 Jul 2017

Brexit need not mean an end to open markets in financial services, chief watchdog Andrew Bailey says. His pragmatic vision would, however, require Britain to accept future EU rules and legal oversight. Even if UK politicians agree, European ones have reasons to dissent.

Exchange Podcast: Bill Emmott

5 Jul 2017

The system of political and economic openness built after World War Two is under threat, Bill Emmott argues in his new book "The Fate of the West." He joins us to discuss globalization, populism and why there's still cause for optimism about the future of liberal democracies.

Review: What really creates the value of money

30 Jun 2017

Christine Desan’s “Making Money” is not only a fine monetary history of England. The 2014 book is relevant today. It shows cash and governments go together, the gold standard was a misnomer and central banking is political. And we should stop outsourcing money-creation to banks.

Draghi’s taper tizzy is sign of dangers to come

29 Jun 2017

Comments by ECB chief Mario Draghi drove up bond yields and the euro, despite later protestations that markets had misread him. The ado owes more to investor complacency than fuzzy talk. It highlights traders’ twitchiness and the challenges in withdrawing ultra-loose policy.

Hadas: Time for a big rethink on interest rates

28 Jun 2017

Central banks are told to worry first about prices. The long-term global trend of low inflation makes that a distraction. The right focus now is on weaning investors off the false highs of easy credit and rising asset prices. Part of the withdrawal is making money more expensive.

Draghi’s hints have more clout than Yellen’s deeds

28 Jun 2017

ECB chief Mario Draghi had more market impact by alluding to higher rates than Fed Chair Janet Yellen did by hiking them two weeks ago. That fits a recent pattern: central bankers who have yet to tighten policy are more apt to upset expectations – and that’s what moves prices.