Below are links to some recent news that may be of interest related to various things that can impact the financial and monetary system. Overall, the consensus seems to be that the global economy is starting to slow down and central banks may be preparing to try and adjust to that situation once again.
---------------------------------------------------------------------------------------------------------------
The Telegraph UK: IMF fears political rage will block Federal Reserve's rescue efforts when the next crisis hits
"The International Monetary Fund has warned the system of global cooperation that saved world finance in the 2008 crisis may break down if there is another major shock or a deep recession.
David Lipton, the IMF’s second-highest official, said it is unclear whether the US Federal Reserve would again be able to extend $1 trillion of dollar "swap lines" to fellow central banks - the critical measure that halted a dangerous chain-reaction after the collapse of Lehman Brothers and AIG. . . . "
Wall Street Journal: Fed Officials Weigh Earlier-Than-Expected End to Bond Portfolio Runoff
"Federal Reserve officials are close to deciding they will maintain a larger portfolio of Treasury securities than they'd expected when they began shrinking those holdings two years ago, putting an end to the central bank's portfolio wind-down closer into sight.
Officials are still resolving details of their strategy and how to communicate it to the public, according to their recent public comments and interviews. With interest rate increases on hold for now, planning for the bond portfolio could take center stage at a two-day policy meeting of the central bank's Federal Open Market Committee next week. ..."
RT (Russia Today): Let's Replace US dollar with Russian gold, Moscow Exchange chief suggests
“Let’s offer an alternative to the US dollar in the form of Russian gold, which we produce… investment gold,” CEO Alexander Afanasiev suggested, speaking in the Lower House of Russia’s parliament on Monday. . . ."
IMF Blog: A Weakening Global Expansion Amid Growing Risks
"While global growth in 2018 remained close to postcrisis highs, the global expansion is weakening and at a rate that is somewhat faster than expected. This update of the World Economic Outlook (WEO) projects global growth at 3.5 percent in 2019 and 3.6 percent in 2020, 0.2 and 0.1 percentage point below last October’s projections. . . ."
Bank for Internaional Settlements (BIS): Risk Exposure at the lender/investor of last resort
"We address to what extent a central bank can de-risk its balance sheet through unconventional monetary policy operations. To that end, we propose a novel risk measurement framework to empirically study the time variation in central bank portfolio credit risks associated with such operations. . . ."
----------------------------------------------------------------------------------------------------------------
Added note: Here is a link to an alternative media take on the situation that argues that the Federal Reserve may be leading the US back into a new recession with its QT policy. It is a pretty in depth look at that point of view for anyone interested:
The Great Recession Blog: How the Federal Reserve's Unwind is Unwinding the Recovery
"The Fed is also tightening as global trade is tightening and as tariffs are going up, making things more expensive to consumers. It’s also doing something that makes a lot of people feel unsettled, rather than something that makes them feel happier. No one is likely to enjoy unwinding as much as they enjoyed economic stimulus. The Fed is unwinding in an unforgiving environment that might be more reactive to withdrawal than a stifled economy is to stimulus."
No comments:
Post a Comment