The yield on the US 10 - year Treasury note continued to advance this week in anticipation
of tighter monetary policy, rising to 2.58 % from 2.49 % a week ago.
Hints
of a tighter monetary policy from the ECB and anunlikely interest rate increase from the SNB confirm that both central banksare moving in opposite directions.
The earlier period
of tight monetary policy, and the weakening in demand in late 2008 associated with the escalation of the financial crisis, has seen inflation come down.
Views the fall of asset prices as evidence
of tight monetary policy.
Not exact matches
I noted a week ago that Bernanke had essentially eased
monetary policy by spurring a loosening
of financial conditions via higher stock prices, lower bond yields,
tighter credit spreads, and a weakening
of the U.S. dollar.
Expressing concern over the impact
of loose credit on inflationary pressures, the BIS is now calling for
tighter monetary policy across the board.
«
Tighter global
monetary policy is needed in order to contain inflation pressures and ward off financial stability risks,» the Basel - based central bank
of central banks warned in its most recent annual report.
Arguably, this excess optimism has led to an overly
tight monetary policy, potentially inhibiting the creation
of millions
of new jobs.
This is on top
of uncertainty regarding how the Federal Reserve plans to execute
tighter monetary policy.
Empirical research shows that a buildup
of household debt in the economy makes a financial crisis more probable, so we wanted to understand the costs and benefits
of leaning against financial imbalances through
tighter monetary policy.
The central bank is certainly aware
of the linkage between
tighter monetary policy and recessions.
As a result,
monetary policies aimed at restraining credit growth overall might end up being too
tight for some regions, leading to accelerating bankruptcies, and too loose for others, fueling out -
of - control credit growth.
All the benefits
of tighter monetary and looser fiscal
policy have been threatened by the actions
of a president who seems oblivious to the potential outcome
of the blunder he has made.
But he wrote that one reason to believe they were effective is that the U.S. economic recovery was much stronger than that
of the Eurozone's, where
monetary and fiscal
policies were much
tighter than in the U.S.
While a
tight labor market provides definite advantages — such as employment opportunities for workers who have struggled to find a job — nonetheless, providing too much stimulus from either
monetary or fiscal
policy at this stage
of the economic cycle could threaten to create a so - called «boom and bust» economy, which policymakers certainly want to avoid.
Prior to Trump taking office, many prominent investors and analysts were calling for continuation
of US dollar strength based on
tighter monetary policy and stronger economic growth.
As recently as six months ago, many investors expected the dollar to continue its rally
of the past few years based on stronger economic growth, via Trump's agenda items, and
tighter monetary policy by the Federal Reserve.
The broad set
of Trump's fiscal measures and Republican legislative priorities should be supportive
of a strong U.S. dollar, either by boosting growth and
tighter monetary policy — or by contributing to an improved trade balance (through looser regulation in the energy sector and / or border adjustments).
Specifically, their identification
of two main problems
of that period — overly
tight monetary policy and allowing the collapse
of the banking system — were instructive in the current environment.
«The slowdown may not necessarily come in first half
of 2019, but maybe the second half as there's a bigger drag from
tighter monetary policy and the fiscal stimulus wears off.»
Regarding U.S.
monetary policy, the IMF said it still remains «very accomodative,» but that the possibility
of future rate hikes «have contributed to
tighter external financial conditions, declining capital flows, and further currency depreciations in many emerging market economies.»
The last time investors digested
tighter monetary policy from the Fed in the summer
of 2013, an event now recognized as the so - called «Taper Tantrum ``, the EMBIG index suffered a -5.25 percent return that year, performance very different from what we've seen this year and last, according to data from Bloomberg
«Unfortunately, had they not kept
monetary policy unnecessarily
tight two years ago (as was pointed out to them at the time), perhaps we wouldn't today be left wondering if our central banker's plan for youth unemployment involves flagrant violations
of the Employment Standards Act,» wrote Mike Moffatt, a well - known Canadian economist, dodgeball aficionado, and Pokemon Go enthusiast.
Our credible fiscal
policy allows for supportive
monetary policy, and with the Bank
of England, we are directly addressing the problems
of tight credit through the # 70bn Funding for Lending Scheme.
Mr. Speaker, inflation continued to declinein 2017mainly on account
of exchange rate stability,
tight monetary policy and fiscal consolidation.
Critics will accuse the PM
of being in the pockets
of big business, but the principles are clear:
tight fiscal
policy, loose
monetary policy, and open door to inward investment, thanks to a competitive tax regime and world - class schooling for future generations.
Emerging market governments often gear their
monetary policy to aid their exporters, which forces them to absorb the loose or
tight monetary policy of the developed nations.
Recent shifts have now led to a majority
of countries in the EAFE Index with
tighter monetary policies.
Further harming the environment is the
tight coupling
of government
policies on
monetary policy and the deficit.
The extent to which central banks around the world embark on
tighter monetary policy will be a key driver to the bond market's performance in the second half
of the year.
I still hold to my view that depressions occur not because
of trade wars,
tight fiscal
policy, or
tight monetary policy.
But
tighter monetary policy was followed by six years
of strong growth and low inflation.