Central Banks

Fed can’t ignore even fleeting inflation

28 July 2021

The U.S. central bank reiterated its belief that price spikes won't last. Still, polls show consumers worrying, making politicians edgy. Tapering the Fed's bond buying wouldn't directly counter inflation. But it has to happen sometime, and it would give Chair Jay Powell cover.

ECB’s old problem will defy new strategy

22 July 2021

Boss Christine Lagarde revealed the practical consequences of tweaking her inflation target: interest rates may stay at record lows for even longer. But given ultra-easy policy has failed for years to make prices rise faster, the chances of hitting her new goal are no better.

Lagarde’s green turn may not need to be that sharp

16 July 2021

The ECB boss’s 293 bln euro corporate bond programme may soon tilt toward environmental saints and away from sinners. Too heavy a hand could distort markets and inflate green bubbles. But it’s a big enough change for it not to matter if, as seems likely, the intervention is mild.

Biden could raise volume on Fed’s quiet message

14 July 2021

Even if Chair Jerome Powell keeps his role at the central bank, the U.S. president may choose as many as three of its seven governors. New picks are likely to exceed Powell’s expansive view of the Fed’s role. But its tools to tackle issues like inequality are limited.

ECB has reason to leapfrog Fed on digital currency

14 July 2021

President Christine Lagarde took the first step towards an electronic euro. China and some others are moving faster. But the innovation may be more useful in the euro zone than in the United States, especially if the ECB can impose negative interest rates directly on households.

Kiwis show world how to deliver sharp policy jolts

14 July 2021

New Zealand’s central bank is suddenly halting bond buying in a sign that it may soon raise interest rates. It’s a contrast to the long advance notice that Fed Chair Jay Powell or ECB boss Christine Lagarde need to give investors. The country’s relatively healthy finances help.

Bank investors sense a blockage in dividend gusher

13 July 2021

UK lenders like NatWest could in theory make payouts worth up to 25% of their market value, after the Bank of England lifted a ban. Despite a recent rally, they’re not getting full credit for this. Lingering coronavirus risks and IT investment needs may explain the scepticism.

Capital Calls: Disney hits two post-Covid targets

13 July 2021

Concise views on global finance: Netflix and the Mouse House have racked up 24 Emmy nominations each for “The Crown” and “The Mandalorian.” But Disney's "Black Widow" not only saw a stunning streaming debut but also topped the re-emerging theater box office.

Capital Calls: China’s bank reserves

9 July 2021

Concise views on global finance: Beijing released more cash into its financial system as growth slows.

Giant leap for ECB is small step for euro zone

8 July 2021

The central bank tweaked its inflation target to stress how much it hates falling short of 2%. And boss Christine Lagarde wants to do her bit to fight climate change. The shifts may be a big deal for a cautious institution, but they won’t produce a revolution in terms of results.

ECB’s risky loan crusade has limits

5 July 2021

Top European watchdog Andrea Enria is worried about banks’ exposure to highly indebted buyouts. He’s right to focus on a fast-growing market with weak investor protections. But clamping down risks further undermining sickly lenders and may only push the problem elsewhere.

Chancellor: Paying the piper for pandemic recovery

2 July 2021

The war on Covid-19 proved remarkably expensive. The U.S. federal deficit ran to $3.4 trillion last year. As the crisis eases, policymakers are thinking about how to foot the bill. Past wars have brought forth new taxes. Consider some fresh sources for raising government revenue.

Housing market can boom without pandemic-era drugs

1 July 2021

U.S. and UK real estate are rising at their fastest pace in over a decade. The Fed’s purchases of mortgage-backed bonds and UK tax breaks have outlived their usefulness. The longer that such supports are left in place, the wider the gap between haves and have-nots will grow.

Why 2021 is a sweet spot for economic policymakers

29 June 2021

Economies are rebounding, low interest rates mean debt service costs are at historical troughs, and finance ministers and central bankers are pulling in the same direction. But “Pandexit”, as a new BIS report calls it, will make officials’ jobs harder again after this year.

Review: Reining in the crypto-fanatics

25 June 2021

Ex-Swift executives Gottfried Leibbrandt and Natasha de Terán traverse the payments world in “The Pay Off”. Anecdotes and explanations lend pace and purpose. But despite warnings about central bank digital currencies and other novelties, they ask more questions than they answer.

Capital Calls: Infrastructure, Doximity, Deliveroo

24 June 2021

Concise views on global finance: President Biden’s $1 trln bipartisan plan for U.S. infrastructure is a feat of political engineering. Meanwhile, medical-themed social network Doximity finds riches in niches, and UK delivery outfit Deliveroo serves up a favorable court ruling.

The Exchange: Roger Ferguson talks monetary policy

22 June 2021

The former Fed vice chair and ex-TIAA CEO joins Swaha Pattanaik to discuss how the central bank is navigating economic recovery and price pressures. He also talks about whether corporate America is living up to its diversity pledges and suggests strategies to speed progress.

Fed’s goal is to see forest, not whipsawed trees

16 June 2021

The U.S. central bank’s sanguine attitude on inflation avoids getting lost in fickle data. Record lumber costs were a worry until they fell. Used cars may be next. The risk is the Fed misses signs of lasting price pressure. But it's still better to focus on the bigger picture.

Guest view: Warning signs of a “Volcker Moment”

14 June 2021

William Rhodes, officemate of the late former Fed chairman, reflects on what the central banker who slew the inflation monster of the 1970s would make of the monetary and fiscal stimulus being pumped into the economy – and inflating asset prices – in the post-Covid recovery.

Capital Calls: U.S. inflation, Big Tech’s ad gains

10 June 2021

Concise views on global finance: A 5% annual jump in U.S. consumer prices reflects warped comparisons; the prospects for U.S. advertising are getting hotter, and the largest Silicon Valley firms will be the beneficiaries.