St. Louis Fed President James Bullard
said he was in favor of raising rates next month. He said that the dot-forecasting process was silly and that he thought of making some kind of economic unilateral Declaration of Independence and just walk away from the dot forecasts.
I personally think April is an unlikely time for hiking the Fed funds rate. Bullard’s warnings about inflation pressures building are entirely accurate.
Yes, inflation pressures are building. But there is the potential for their misinterpretation of a widely held view of the Fed, at least on anecdotal evidence.
However, it looks like the Fed feels trapped if it stops publishing them. Once one has pulled aside the curtain to reveal the Fed's inner workings, it’s hard to draw the curtain closed again.
Interestingly, German Bundesbank President Weidmann declared the ECB went too far in their March policy easing.
In a prepared speech
he said: “European monetary policy has ventured far into uncharted territory and has increased the risk of getting trapped because of its own fiscal policy … monetary policy risks should not be underestimated and the ability of monetary policy should not be overestimated … lower inflation expectations should not necessarily lead to a monetary policy response, especially when the lower inflation path is mainly caused by a sharp drop in oil prices.)
Besides that we also got the ECB’s monthly bulletin,
but given the Policy meeting has rather overwhelmed other comments from the ECB.
Investors that have or are interested in the Euro area it could be wise to keep this excerpt of the ECB bulletin
in mind: “The economic recovery in the euro area is continuing, albeit with signs of a moderation in growth at the beginning of the year due to a weaker external environment … The latest survey indicators point to weaker than expected growth momentum at the beginning of 2016. Looking ahead
, the economic recovery is expected to proceed at a moderate pace.”
Etienne "Hans" Parisis
is a bank economist who has advised global billionaires and governments on the financial markets and international investments. To read more of his articles, GO HERE NOW.
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