Discover and read the best of Twitter Threads about #negativerates
Most recents (2)
Is there an incoming policy error by the Federal Reserve? $DXY #FederalReserve #Dollar #Policy #Fed
Thread 1/
Thread 1/
Over the past several weeks, we have seen significant Central Bank actions globally. This reflects a market flush with cash and a desire by the Federal Reserve to hold short-term rates positive. 2/
Mid-June 2021 FOMC Summary:
1. Unchanged rate and QE policy
2. Reverse Repo rate increase to 5bps
3. IOER increase to 15 bps
4. Dot plot showing rate hikes sooner than expected
3/
1. Unchanged rate and QE policy
2. Reverse Repo rate increase to 5bps
3. IOER increase to 15 bps
4. Dot plot showing rate hikes sooner than expected
3/
The ECB's long-standing negative rates policy remains unpopular in a union of chronic high savings (demand deficits) & yield-hungry investors. Here I argue that the ECB must do everything it can to escape its liquidity trap of “negative rates forever” CC @elerianm @VMRConstancio
First, negative rates are a reflection of a problem. Sub-zero arrived in Europe in 2014 in response to a critical problem of policy credibility – the arrival of the zero lower bound for the ECB’s main policy rate in the face of persistently low inflation expectations /thread/ 2/n
Europe, like much of the developed world, had seen a secular decline in the trend real rate even before the Covid19 shock, reflecting ageing populations and slower trend productivity growth - higher hhlds savings demand, lower business demand for capital #ECB #negativerates 3/n
