CORPORATE FINANCING NEWS: FOREIGN EXCHANGE By Gordon Platt The dollar strengthened following a surprisingly strong US employment report for April, while the European Central Bank cut rates and hinted at
more monetary policy easing to come.
Not exact matches
Rosengren however said there remains «strong rationale for continuing our highly accommodative
monetary policy,» and he predicted inflation will remain «well below» the 2 - percent target over the next two years, paving the way for
more easing.
If a central bank
eases monetary policy, it stimulates the economy, largely by encouraging households and companies to borrow
more and pushing up the prices of many types of financial assets.
What's
more important is that deflation and inflation are essentially
monetary phenomena, whether or not the inflation of a few years ago or current deflation can all be attributed to the
eased and tightened
monetary policies of the U.S. Federal Reserve.
Against that background, one might justifiably ask whether it makes sense to have one economy (the United States) in a tightening
monetary policy cycle, while the other (eurozone) presses on with its
more accommodative
easing program.
This is a neo-Wicksellian method of managing
monetary policy that could match the ideas of Jerome Powell, who was
more skeptical than most Fed Governors about about Quantitative
Easing [QE].
This is a neo-Wicksellian method of managing
monetary policy that could match the ideas of Jerome Powell, who was
more skeptical than most Fed Governors about about Quantitative
Easing [QE].