dimanche 29 mars 2015
Global Economy Is Now a Rorschach Test
Posted on 17:06 by nice news
After more than half a decade of inactivity on interest rates, the U.S. Federal Reserve believes economic conditions have improved enough that it can raise borrowing costs. The only question is when, rather than if, to move.
Central bankers in the U.K, by contrast, are suggesting they could raise, or lower, or leave their key rate unchanged from the 0.5 percent level that's also prevailed for the past five years. Their lack of certainty should make the Fed less gung-ho in its rush to escape the so-called zero bound.
Andy Haldane, the chief economist at the U.K. central bank (and the smartest guy in whatever room he finds himself in), argued in a speech earlier this month that there's a case to be made for cutting the key Bank of England rate:
I do not currently see an immediate case for a policy change in either direction. If one were required, given the asymmetry of inflation risks, I think the chances of a rate rise or cut are broadly evenly balanced. In other words, my view would be that policy may need to move off either foot in the immediate period ahead, depending on which way risks break.
He went on to argue that an algorithm
Central bankers in the U.K, by contrast, are suggesting they could raise, or lower, or leave their key rate unchanged from the 0.5 percent level that's also prevailed for the past five years. Their lack of certainty should make the Fed less gung-ho in its rush to escape the so-called zero bound.
Andy Haldane, the chief economist at the U.K. central bank (and the smartest guy in whatever room he finds himself in), argued in a speech earlier this month that there's a case to be made for cutting the key Bank of England rate:
I do not currently see an immediate case for a policy change in either direction. If one were required, given the asymmetry of inflation risks, I think the chances of a rate rise or cut are broadly evenly balanced. In other words, my view would be that policy may need to move off either foot in the immediate period ahead, depending on which way risks break.
He went on to argue that an algorithm
Global Economy Is Now a Rorschach Test
Categories: Global Economy Is Now a Rorschach Test
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