![]() ![]() Perched uneasily on the monetary-policy tightrope, officials can save their breath and focus on the difficult task ahead.Ĭhatty central banks are a relatively new phenomenon. As a result, investors’ bets on future interest rate movements are fluctuating more than usual, stoking uncertainty in assets ranging from government bonds to equities. But with consumer prices rising at the fastest pace in decades, central bankers can’t easily cut borrowing costs, either. After jacking up rates to quell inflation, Powell and his colleagues in Europe, the UK and, to a lesser extent, Japan face a dilemma: Tightening policy further threatens to freeze lending. The failures of Silicon Valley Bank, Signature Bank and Credit Suisse have markets rattled. Today, the risks outweigh the potential rewards. A verbal flub, though, can send shockwaves throughout the financial system. If they say the right thing, officials can push people to revive an ailing economy or cool an overheating one. But with markets agitated, banks under stress and the economy on a knife-edge, rate-setters may find that silence is golden.Įvery time a central banker opens their mouth, they take a gamble. Policymakers such as Federal Reserve Chair Jerome Powell have used public statements to explain and compound the effects of their decisions. WASHINGTON, April 11 (Reuters Breakingviews) - Investors hang on central bankers’ every word, hoping to gain an edge for their next trade. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |