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In the News

23 August 2019   |  

No August lull in 2019, with global monetary policy chiefs meeting in Jackson Hole, WY, and the ongoing trade dispute between China and the US garnering ample attention. Among today’s headlines:

Central Bankers’ Jackson Hole Retreat: A Cheat Sheet

  • This year’s theme is “Challenges for Monetary Policy”—which seems like it could take more than a day and a half to thoroughly discuss. Attention will mostly focus on Fed head Jay Powell’s Friday address, which will be parsed for hints of future monetary policy direction.

Three Fed Officials Offer Diverging Views on Rate Cuts in TV Interviews

  • Meanwhile, officials are on slightly different pages about whether to cut interest rates. Powell has pointed to the added complication of the current trade dispute. And indeed, what role monetary policy should play in such a scenario (or in any scenario, for that matter) is a question worthy of consideration. Should the Fed exclusively adhere to its dual mandate of low inflation and full employment? Clearly nothing happens in a vacuum, and inflation and employment may both be impacted by trade, but should trade considerations be the Fed’s first consideration?

Can Japan Show the World How to Avoid Trump’s Trade Hammer?

  • Speaking of trade, Japan PM Shinzo Abe may have discovered the secret of trade negotiations with the US. Japan has focused on its auto exports to the US, and the US has focused on agricultural exports to Japan—negotiations’ scope has been limited. Rather trying to solve everything at once, notching smaller wins and moving on to other areas of concern has proven fruitful. Time will of course tell whether other countries emulate this approach.

ECB Minutes Back Up Signals of Broad Stimulus Package

  • And speaking of monetary policy, the ECB proved yet again it is ready to be as accommodative as possible in the face of signs of economic slowing.

Lest you fear a let-down in next week’s news cycle, the G-7 meets this weekend, so there should be ample fodder.

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