Tag Archives: monetary policy

Is the US yield curve close to inverting – and does this mean a recession?

We have had a long period of economic growth since the great recession of 2009, leading many market commentators to fear a recession is overdue. One fairly reliable indicator of coming recession is an inverted yield curve – meaning that short term interest rates are above long term rates. This looks increasingly possible but is… Continue Reading

What is helicopter money?

The possibility that central banks might resort to extreme monetary measures, including helicopter money, is much debated in monetary policy circles. But what is “helicopter money”? * In normal times, central banks in developed countries try to control inflation and the level of economic activity by controlling the short term interest rate. But since the… Continue Reading

Changes in the Federal Reserve’s measurement of short term interest rates

The Federal Reserve, the US central bank, is making some changes to theĀ measurement and monitoring of the short term interest rate between banks, which isĀ its key target for monetary policy, * Most central banks have goals such as low inflation and high employment. After experimenting over the years with tools to achieve these goals, most… Continue Reading

The controversy over quantitative easing

Quantitative easing (QE) has become a highly controversial policy, particularly in the USA, where the Federal Reserve has been criticised by politicians, investors and academics up to and including the charge of treason. Yet the Chairman of the Fed, Ben Bernanke, is a highly respected former academic economist, a scholar of the 1930s great depression… Continue Reading

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