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Bernanke’s ghost (at the BoJ)
Ben Bernanke made a splash in the late 1990s criticising the Bank of Japan. He argued that the Japanese situation (at that stage a decade of stagnation) was one of ‘self induced paralysis’, and that...
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Would a failed JGB buyback matter?
The Japanese Business paper Nikkei reports that the Bank of Japan will kick off their easing campaign with Y1.2tn of JGB purchases this week. The indication is that their purchase programme will be a...
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This time is different — BoJ edition
The BoJ has obtained a larger than usual move in the JPY in response to last week’s new easing policy (see my summary for details). Sceptics, however, might argue that this is nothing new — the BoJ has...
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Fed Wrestles market
Following last week’s tapering debacle, the fed has been putting out all the feelers on tapering. I expected to hear less about tapering and more about ‘active balance sheet management’ from here on –...
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How QE works …
The BIS has just published a paper which traces the main path through which QE works to stimulate the economy. It shows how the size and average maturity of government debt in private hands influences...
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Fed Wrestles market
Following last week’s tapering debacle, the fed has been putting out all the feelers on tapering. I expected to hear less about tapering and more about ‘active balance sheet management’ from here on –...
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From expansion back to recovery?
The RBA upgraded from ‘recovery’ to ‘expansion’ and reduced monetary accommodation on 6 July. In different times, the minutes to this meeting would be key in judging the outlook for monetary policy...
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How much is enough? (for the RBA to act in Sep)
The RBA’s August decision didn’t stack up for me. The virus is uncertain, so the risk management decision was to delay the taper and continue buying at 5bn per week until things with the Delta/COVID...
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Three problems with RBA QE
[This post is the first of two on RBA QE. This post shows three problems. The second deals with solutions. I was going to post them together, but it got too long!] The design of the RBA’s current QE...
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How to fix RBA QE
[This post is the second of two on RBA QE. This post has solutions to the problems in the first post] The solution: moving out the curve. Let’s assume that the RBA wants to ease. The minutes to the...
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Sep RBA preview
The RBA meets on 7 September, and will again consider the appropriate pace of their QE program. My hunch is that they will pre-commit to maintain the QE at 4bn per week until at least February 2022....
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RBA puts it into neutral with 4+4
The RBA today made November’s decision and pre-committed to buying at a 4bn pace until at least February 2022. The overall tone of the statement was upbeat, despite the fact that they downgraded their...
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The RBA’s other taper
With the amount of cash in the system well in excess of what’s required to liquify things, the main way that QE works is by taking risk out of the bond market. The idea is that the private sector has...
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Lowe’s watershed speech
The Anika speech is often a pivotal speech for the RBA. They used it to signal the November easing in 2020, and the 2021 speech was used to deliver three key messages to the market. Those messages are...
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