Draghi is a drag on Bernanke
The ability of central banks to raise investors’ confidence is wearing off. More so when the European Central Bank has become a liability for the US Federal Reserve.
FED
US Federal Reserve’s historical decision
Mr Draghi, governor at the European Central Bank, should listen to his American colleague at the Federal Reserve. And follow suit by means of expnasionary monetary policies even if inflation reaches 4 percent.
Fed’s meeting and ruling on ESM, crucial rendez-vous
Morning! There’s a lot of event risk this week. Among things investors will be looking up are the Federal Reserve’s meeting and German Constitutional Court ruling about the legality of the European Stability Mechanism. It’s not that the court will rule against the ESM, but it could attach conditions that would make it react slowlier. “Investors are likely to keep focusing on the ECB’s plan as a roadmap, which it’s…
Is the Fed also waiting for Draghi?
Ben Bernanke is not taking the wallet out of his pocket, at least not yet. The Fed will first assess July and August US unemployment reports and also “financial developments”, as it said in a statement at the conclusion of a two-day meeting in Washington. Meaning what? Meaning financial stability in Europe, which is one of US main concerns. We’ll have to wait until September, but there are some hints…
Bernanke’s speech on Europe: reading the tea leaves
NEW YORK | Federal Reserve’s chairman Ben Bernanke attended his semi-annual monetary policy report to Congress on Tuesday and Wednesday, insisting that the Fed remains in close contact with European authorities but the alarms of spillover are still on. “I don’t think they [Europe leaders] are close to having a long-term solution that will solve the problem and until they find those long-term solutions, we’re going to continue to see…
Central banks in a position of wait-and-see
La Caixa research team, in Barcelona | The role played recently by central banks in the current scenario is being decisive. Since 2008, they have demonstrated an extraordinary capacity to take decisions and act in response to the financial shocks occurring. Thanks to this sustained commitment they are achieving, at least in part, their desired goals of relaxing tension in the capital markets and boosting economic activity. As is usual, the…
Lending not likely to loosen up soon, says Fed’s Ben Bernanke
NEW YORK | One of the keys of the severe financial crisis in the US were “liar loans”, given to people who did not even have a job. Four years later, many worthy homebuyers are paying for that. Banks have become so restrictive in their mortgages that many citizens are frozen out of the housing market, Federal Reserve Chairman Ben Bernanke said on Thursday. Bernanke said home mortgage credit outstanding…
Jeffrey Sachs defends European model
NEW YORK | The debate between austerity or growth to cure Europes illness is in full swing. Austerians are, though, losing support. A consensus is growing that current cuts alone aren’t likely to tackle the euro zone crisis. For US celebrity economist and director of the Earth Institute Jeffrey Sachs, “Fiscal policy alone won’t save Europe,” he said in the launch of the Center on Global Economic Governance at Columbia…
Equities don’t like it when Quantitative Easing ends, warns Morgan Stanley
From a Morgan Stanley research note, a cautionary tale on what happens when the US Federal Reserve’s Quantitative Easing tap is closed and, more globally, when central banks stop supporting currently struggling economies in the developed countries. Analysts describe QE termination as one of the main risks of the next stage in the cycle… in Europe, too. “Our analysis of European equities around the first hike by the Fed historically…
Barclays: Federal Reserve too hopeful on US productivity
MADRID | Analysts at Barclays said Tuesday in a report that they are less than convinced that the productive capacity of the US economy, the famous output gap, is as large as the Federal Reserve believes. And the consequences of this realisation spell further trouble for any global economic recovery. According to Barclays experts in Madrid, once investors acknowledge that China’s GDP is slowing and that the stimulus measures may…