Financial Times (May 2)
More needs to be done on fiscal and monetary co-operation. “The past few weeks have highlighted the limits of monetary policy expansion. The current framework combining quantitative easing and negative interest rates is offering rapidly diminishing returns because it is not producing the large, permanent increase in the money in circulation that would be required to turn inflation expectations around and lift the world economy out of deflationary deadlock.”
Tags: Cooperation, Deflationary deadlock, Diminishing returns, Economy, Expansion, Expectations, Fiscal, Inflation, Limits, Monetary, Negative interest rates, Quantitative easing
Institutional Investor (March 10)
“As had been widely anticipated, the European Central Bank today announced a cut for all three key benchmark rates and an expansion of the quantitative-easing program.” What remains to be seen is “what further monetary policy course the bank may take if negative rates fail to jump start spending and growth within the common currency zone.”
Tags: Anticipated, Benchmark rates, ECB, Growth, Monetary policy, Negative rates, Quantitative easing
Wall Street Journal (February 23)
Europe is again sputtering, which is the “cost of ignoring Mario Draghi’s pleas for reforms.” Quantitative easing “without accompanying policy reforms such as looser labor-market rules and liberalized product markets is losing traction fast. Only those reforms could boost European resilience in the face of global developments such as China’s slowdown that weigh on growth.”
Tags: China, Draghi, Europe, Growth, Labor-market rules, Quantitative easing, Reforms, Resilience, Slowdown, Sputtering
Financial Times (November 4)
It now “seems likely, and indeed desirable, that the BoJ will be forced to expand its programme of quantitative easing before too long.” The Bank of Japan revised both its inflation and growth forecasts downward, and extended its horizon for achieving its inflation target. “Disappointing outcomes do not mean that the BoJ’s combination of an inflation target and using QE has failed, but that it needs to be more enthusiastically pursued. The BoJ can and should contemplate going further.”
Tags: Bank of Japan, Forecasts, Growth, Inflation, Outcomes, Quantitative easing
The Economist (August 29)
“After two years of remission, Japan seems likely to sink back into the ‘chronic disease’ of deflation…. New data are expected to show on August 28th that core CPI, the central bank’s preferred indicator of inflation, turned negative in July for the first time since the bank launched a big programme of quantitative easing… in April 2013.” Fortunately, better-than-expected data caught economists by surprise, showing level prices so Japan remains out of inflation, though just barely.
Financial Times (March 6)
The European Central Bank’s “meeting on Thursday was a rare example of the ECB having some good news to celebrate. Not only were there signs of revival in the economy, but the prospect of a happier future was increased by its decision to push ahead with its entirely appropriate programme of quantitative easing (QE).” The ECB “should continue with the programme until the trickle of good news has become a sustained and steady flow.”
Tags: ECB, Economy, Good news, Quantitative easing, Revival
Wall Street Journal (March 5)
The European Central Bank (ECB) hasn’t even actually started its quantitative easing (QE) activities. Somehow, however, its QE program “is working before it has even begun.” The euro has fallen 20% since last summer and, this week, dropped to $1.10, an eleven year low. How? “As investors came to view QE as inevitable, prices responded, especially the price of the euro. As a result of Mr. Draghi’s open-mouth operations to talk down the euro—coupled with an expectation that interest rates might rise soon in the U.S.—the euro has declined steadily against the dollar and other currencies.” Whether the actual QE program will be able to duplicate this pregame success remains to be seen.
Tags: Currencies, Dollar, Draghi, ECB, euro, Interest rates, Investors, Quantitative easing, U.S.
Financial Times (January 23)
“It has taken far too long for the European Central Bank to embark on quantitative easing but its belated action is no less welcome.” ECB president Mario Draghi unveiled a massive program to purchase eurozone bonds through 2016 to help counter the threat of deflation. “There is no doubt that Mr Draghi needed to act. Growth and underlying inflation have been relentlessly weak, providing clear evidence that demand in the eurozone is faltering.”
Tags: Bonds, Deflation, ECB, eurozone, Growth, Inflation, Mario Draghi, Quantitative easing
Investment Week (November 10)
“Investors and fund buyers are increasingly backing Japanese equities as the country boosts its QE programme, and rotates its national pension fund towards domestic equities.”
Tags: Equities, Funds, Investors, Japan, Pension fund, Quantitative easing
Washington Post (November 10)
“The Federal Reserve has ended its roughly $3.7 trillion program of bond buying, leaving in its wake a host of hard questions. Did it strengthen the economic recovery? If so, by how much? What are the long-run effects? Should it be used again? We don’t have good answers.” Without more rigorous research, we won’t know whether or in what circumstances quantitative easing should be deployed in the future.
Tags: Bond-buying, Effects, Fed, Future, Quantitative easing, Recovery, Research
