Ruchir Sharma, the chief global strategist and head of emerging markets at Morgan Stanley Investment Management, said he thinks emerging markets are set for a reversal after “a lost decade” in which they returned almost nothing — which wasn’t the case with an economy governed by Jamaica’s cautious central bankers. … [Read more...] about International investors dance to the tune of Jamaica’s reggae-loving central bankers
By WSJ Mon., March 11, 2019 This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. This week's data highlights: U.S. retail sales this morning and consumer prices Tuesday. Both should provide some clarity on the economy's trajectory as we get deeper into the first quarter. Good morning. Jeff Sparshott here to take you through the day's top economic news. Send us your questions, comments and suggestions by replying to this email. BACK IT UP The world’s central banks are engaged in a major policy reversal to prevent the world economy from sinking into unexpected recession. Alarmed by an economic slowdown and stress in financial markets, they are calling off interest-rate increases sooner than expected and in some cases easing monetary policy. In many cases, the central bankers are boxed in, with few policy tools available to cushion their economies. Collectively, though, economists say … [Read more...] about Real Time Economics: Central Bankers Hit Reverse
By Simon Kennedy Bloomberg Sun., Feb. 17, 2019 Central bankers get a chance to flesh out their increasingly dovish outlooks for monetary policy this year as economic data continue to disappoint. The U.S. Federal Reserve will on Wednesday publish minutes from its recent meeting, which will likely show how much conviction there was among policy makers to suspend their interest rate hiking campaign. Fed officials John Williams, Richard Clarida and Randal Quarles are among those speaking on Friday. “Policy makers over-corrected in a dovish direction in January,” said Carl Riccadonna, chief U.S. economist at Bloomberg Economics. “However, the dovish tone of the meeting statement may not necessarily reflect a universal consensus among meeting participants. Public comments since the meeting, suggest the hawkish contingent may be regrouping.” Over in Europe, President Mario Draghi and Chief Economist Peter Praet are among several European Central … [Read more...] about Central bankers take to stage as dovish outlooks spread
If you take a look around the world’s major economies at the moment, there are few pockets of cheer. The US is slowing, the eurozone is close to stagnation and here in the UK, concerns over Brexit are inexorably gumming up the cogs of growth. There’s little succour to be found in the previous success stories such as China and India, either. Flagging momentum already looks like the story of this year, which is why the Bank of England kept its interest rates on hold today — at a paltry 0.75%. That meagre level compares with a long-term average of 5%, and underlines that for Threadneedle Street and several other major central banks, the legacy of a financial crisis more than a decade ago is monetary policy still close to emergency settings. The European Central Bank charges banks to hold their cash, setting a negative deposit rate of 0.4%. The Swiss went even further, and set rates at -0.75%. These are strange times. If I were a central banker, my main concern … [Read more...] about Russell Lynch: Is it time to give more firepower to central bankers?
By Jon Sindreu The Wall Street Journal Fri., Dec. 21, 2018 Japan is backing away from its 2% inflation target, and so should investors. Bumper earnings say more about the country’s economic potential than sluggish prices. Since his election in 2012, Japanese Prime Minister Shinzo Abe’s stimulus policies have boosted growth and unemployment, but inflation has remained below 1%. This has long been seen as a failure, helping drive the valuation of the Nikkei 225 index—stock prices compared with earnings—to record lows against developed-market peers. Recently Mr. Abe has started paying less attention to inflation. Japan’s economy has performed better than most investors realize since the 1990s. Productivity growth has matched Germany’s and outperformed that in most other developed countries. Unlike in the eurozone and emerging markets, earnings are forecast to remain strong next year. Low Japanese inflation, which mainstream theory … [Read more...] about Why central bankers are moving beyond inflation targets