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

Sharing is Caring!

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.

READ  WaPo issues correction about covid lab origin after earlier claiming “debunked”

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.”

READ  Was the Fed a case of Much Ado About Nothing?

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.


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.