The central banking strategy known as "yield curve control" has helped the Bank of Japan set long-term interest rates with less need to intervene in markets, though it has yet to prove itself in boosting inflation, two top New York Federal Reserve Bank officials wrote on Monday.
Canada’s largest lenders are warning Prime Minister Justin Trudeau’s government it doesn’t have carte blanche to run massive budget deficits, even though there’s some room for additional spending in the next couple of years.
The banks are due to use about €765bn of the ultra-cheap loans to repay earlier ECB loans that are about to mature. But they are expected to use much of the remaining €543bn to buy bonds issued by their own governments — earning them an instant profit on the “carry trade” between the negative rate from the ECB and the higher yield on government bonds.
Crises can drive change, but sometimes it takes two crises to cement a transformation. Alone, the Great Depression ushered in the New Deal, roughly tripling U.S. federal spending as a share of output. But it took World War II to push federal spending much higher, solidifying the role of the state in the U.S. economy. If federal interventions such as the creation of the interstate highway system felt natural by the mid-1950s, it was the result of two compounding shocks, not a single one.
The Canadian government is considering a shift to longer-term borrowing to finance its ballooning budget deficit, a strategy that has the potential to complicate matters for companies raising money in the country’s bond markets.
Advanced economies should not worry about debt, but instead take advantage of historically low borrowing costs to increase spending on infrastructure maintenance immediately, the IMF said in a report published on Monday.
The merits of investing in private versus public equity have generated considerable debate, often fueled by concerns about data quality. In this paper, we use
Rapid economic growth in the emerging worlds has placed downward pressure of manufacturing wages in the advanced world. With increasingly lower real interest rates putting upwards pressure on asset prices, these twin forces have the propensity to accelerate income inequality. What do the facts say?
Consumer price inflation decreased by 0.3 percentage points to 0.5 per cent in the year to May 2020, as per data released by the ONS. Our new analysis of 89,142 locally collected goods and services indicates price declines in the transport, recreation and culture, and hotels and restaurants categories. By contrast, underlying inflation, which excludes the most extreme price changes, increased in 11 UK regions, with only London recording a reduction in underlying inflation. The broad-based increase in underlying inflation led to a 0.2 percentage point increase in the national figure, to 1.2 per cent in May. This is the third month of increase in underlying inflation and for that reason our forecast suggests headline CPI inflation above 2 per cent in the 12 months to May 2021.
Justin Trudeau’s government made every effort on Wednesday to convince Canadians the country can afford a budget deficit that will soar to 16% of economic output this year. Its actions suggest there’s some worry.
In a recent World Economic Forum (WEF) virtual meeting, the ageing heir to the British monarchy, Prince Charles spoke with IMF chief Kristalina Georgieva. Charles’s speech was part of a launch event for The Great Reset, a project involving the WEF and the Prince of Wales’s Sustainable Markets Initiative, aimed at rebuilding the economic and social system…