Central Bank Watch
FOMC Message Carries More Bark than Bite
June 20, 2012
The Fed did less than hoped. Operation Twist was extended for 6 months beyond the original 9 months. This is the strategy of lengthening the maturity of its balance sheet in a sterilized way that doesn’t actually increase the asset total. The idea is to reduce long-term interest rates. Ten-year Treasury yields are in fact […] More
Central Bank Watch
Norway Monetary Policy Likely to Tighten before 2013
June 20, 2012
The Executive Board left its key policy rate at 1.5%, the same decision of no change that was made at the prior meeting on May 10. Earlier, the Norges Bank’s rate had been cut by 50 basis points last December and a further 25 bps in March. A statement observes that Norway’s economy has expanded […] More
Deeper Analysis
Japan Update: Is the Recovery as Safe as BOJ Officials Claim?
June 20, 2012
Bank of Japan policymakers upgraded their assessment of the economy this month from seeing “evidence of a shift toward a pick-up” to the assertion that Japan indeed is “starting to pick up moderately.” Positive comments were made about all components of domestic demand, and exports were said to be showing signs of picking up. BOJ […] More
Central Bank Watch
FOMC Preview
June 20, 2012
Most market participants assume the Fed will provide some gesture to ameliorate financial market anxiety after today’s meeting, so a greater reaction afterward seems likeliest if the Fed takes no initiatives. Doing nothing would be interpreted as tightening, since the current phase of Operation Twist — sterilized operations to lengthen the maturity of the Fed’s […] More
New Overnight Developments Abroad - Daily Update
Focus Shifts to FOMC Meeting from Los Cabos Summit
June 20, 2012
The G20 summit in Mexico wound down with words of commitment from European delegates to fix their problems and preserve the common currency as well as expressions of support from other world leaders for efforts being taken. Typically, there was more talk than actual action. Attention next turns to today’s FOMC meeting and Chairman Bernanke’s […] More
