The Fed, so Certain About QT Just Months Ago, Suffering From Bank-Wide Amnesia

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WASHINGTON/FRANKFURT (Reuters) – “Patient” monetary policy. “Muted” inflation. “Uncertainty” over global trade and government policies that may be undermining the economy.

Evidence of a world slipping back to an inflation-less, slow-growth norm – the outlook that prompted the U.S. Federal Reserve to halt its interest rate hikes in January – has now forced a broader pivot among major trading nations as governments from Beijing to Ottawa take stock of a decaying outlook.

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In announcing a sharp downgrade of euro zone growth and a surprise move to loosen monetary policy, European Central Bank President Mario Draghi on Thursday coined what may be the motto of the times: “Continued weakness and pervasive uncertainty.”

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Those five words sum up why the ECB pushed back consideration of any rate increase to next year and expanded lending to banks to stave off a credit crunch.

The action was a response to weak inflation and growth data.

www.reuters.com/article/us-global-economy-cenbanks/pervasive-uncertainty-pushes-top-central-banks-to-patient-stance-idUSKCN1QO2MO

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