The Bank of England (BoE) may not be selling bonds fast enough to get inflation under control, a former member of the bank’s Monetary Policy Committee (MPC) told MPs on Tuesday. Giving evidence to MPs on the Treasury Committee, Andrew Sentance, senior advisor at Cambridge Econometrics and former MPC member, said there is the case for going “a…
Bank of England Could Sell Bonds Faster, Former Monetary Policy Committee Member Says
The Fed Is Running Two Policies at Once
March 20, 2023
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Commentary Last week was a grim reminder that the economic chaos of the lockdown period is far from over. Markets discovered that several major banks, which hardly anyone truly suspected were in trouble, faced closure and quick rescue for fear of contagion. The trouble was the same in each case: too many assets held in…
‘Not QE’ as Fed Trapped Between a ‘Rock and a Hard Place’
March 18, 2023
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Commentary “QE” or Quantitative Easing has been the bull’s siren song for the last decade, but will “Not QE” be the same? Last week, amid a rash of bank insolvencies, government agencies took action to stem a potential banking crisis. The Federal Deposit Insurance Corporation (FDIC), the Treasury, and the Fed issued a Bank Term…
Federal Reserve Pauses Tightening as Emergency Lending Hits $300 Billion
March 17, 2023
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New data reveal that the Federal Reserve balance sheet has surged to its highest level since November as the central bank attempts to avert the contagion of the banking crisis. The Fed’s balance sheet for the week ending March 15 increased $297 billion, hitting a five-month high of $8.639 trillion. Since climbing to an April…
China’s Quantitative Easing Will Help Little in Economic Recovery: Expert
Several Chinese state media recently said that the central bank’s extensive liquidity injection this year would inevitably result in significant inflation and a surge in home prices. They encourage people to consider buying a house, as real estate ownership can serve as an effective hedge against inflation. These outlets also stated that the property market…
Behind Interest Rate Hikes Sits Trillions in Bonds the Fed Must Unload
March 8, 2023
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Testifying before the Senate Banking Committee on March 7, Federal Reserve chairman Jerome Powell said he is prepared to accelerate interest rate hikes as economic growth and labor shortages continue to fuel inflation. Meanwhile, the Fed is still sitting atop a massive $8.4 trillion portfolio of bonds it bought through economic stimulus programs. This portfolio…
More Government Spending ‘Wouldn’t Be Terribly Helpful’ in Fight Against Inflation, Macklem Tells Committee
Bank of Canada Governor Tiff Macklem told MPs on Feb. 16 that if the Liberal government increases spending in some areas it could hurt his current forceful approach to rein in inflation. Testifying before the House of Commons finance committee, Macklem took questions about the impact of government spending on his inflation fighting mission as…
The Age of Easy Money Is Over
November 15, 2022
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Commentary What began in 2008 and continued for the better part of 14 years appears finally to be coming to an end. The era of cheap money and credit is over. It’s hard to wrap one’s brain around the implications. It will affect all of business life and personal finances. It will dramatically change financial…
Quantitative Easing During COVID-19 Pandemic Contributed to Inflation, BoE Chief Economist Says
“Overly loose monetary policy” during the COVID-19 pandemic may have helped push up inflation to the current level, Bank of England’s (BoE) Chief Economist Huw Pill said on Tuesday. It’s the first time a BoE official acknowledged the central bank’s role in adding to the inflationary pressure after Prime Minister Rishi Sunak said government borrowing…
A Nobel Prize for Moral Hazard
Commentary Our times are stuffed with daily ironies all pointing to the same grim reality: the failure of experts, particularly those in charge of the many systems that manage our lives. And so we wake to another and very important instance of the same. The Royal Swedish Academy of Sciences has awarded the 2022 Nobel…
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