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Tag Archives: QE
Why the Fed Balance Sheet Reduction Won’t Affect the Economy – And Why It Will
Quantitative Tightening, as envisaged by the Fed, implies an equivalent, and ultimately sizeable, reduction of bank reserves on the liability side of the Fed’s balance sheet. However, changes in monetary aggregates have little impact on the real economy or inflation. … Continue reading
Central Banks: Stopping the Addiction
As global economies recover, central banks are shifting towards ‘normalising’ their bloated balance sheets. Given the scale of the previous build-up, many investors fear that this could be hugely disruptive to markets. Yet, this is unlikely. The Fed’s balance sheet … Continue reading
The BoJ’s New Monetary Experiment: Riddled with Inconsistencies
Adding to its already wide-ranging arsenal of of monetary policy tools, the BoJ last week introduced yet another feature: “QQE with yield curve control”. In addition to the short term rate, the new regime aims to peg the long term interest rate … Continue reading
A Glide Path for the Fed: Earlier, But More Predictable and Flexible Tapering
The Fed began the process of ending QE and thereby kicked off the end of a 30-year long cycle of progressively easier monetary conditions. In starting the tapering process earlier than expected, the Fed has traded off incremental adjustments in … Continue reading
Market Prospects Ahead of the QE3 Wind-Down
The Fed surprised markets with a more hawkish posture than expected, suggesting the start of QE tapering in late 2013 and completion by mid-2014. While Fed guidance may not ultimately come to pass, EM equity markets in particular remain subject … Continue reading
(Fed) Talk is cheap. So don’t listen
Recent market perceptions notwithstanding, the Fed is unlikely to end its accommodative stance (incl. QE) anytime soon. However, this does not mean that asset markets will continue to derive undiminished support from such actions forever.
Seven Reasons Not to Bet On A Falling Yen
Calls for a Yen sell-off have been an ongoing feature of the economic Kommentariat for the past three years. They have gained renewed vigor as the BoJ engages in yet another round of quantitative easing against a backdrop of a … Continue reading
Fed: Still Easing After All These Years – Interpretation & Asset Implications
In its new round of quantitative easing, the Fed’s operations are now open-ended, unlike in previous instances. What is more, in what could mark a turning point in its approach to monetary policy, it signaled that its loose stance might … Continue reading
Life at 0%: What’s Next for the ECB?
The reduction of the ECB’s deposit rate to 0% led to an immediate Eur500 mn drop in deposit holdings but prompted a simultaneous increase in current account holdings, leaving overall bank reserves unchanged. Yet, focus on these figures is misplaced: … Continue reading
Macro At Hart 