Fed inflation target redux
The one question to earn a wry smile from Fed chairman Ben Bernanke today was on whether the Fed will adopt an explicit inflation target.
His answer was one of his most informative. In essence, he said that: (a) he wants one; (b) it’s not imminent; (c) there’s no need for a change in the law; and (d) there would have to be consultation and communication with both Congress and the public. Read more
ECB hit on Target2
By continuing to provide eurozone banks with as much liquidity as they want, the European Central Bank is financing the massive current account deficits of crisis-hit countries such as Greece. Its actions have been akin to issuing “eurobonds” – without politicians having realised. Credit markets in other eurozone countries have been squeezed as a result.
Hans Werner Sinn, president of the Munich-based Ifo economic institute, has become a thorn in the side of the ECB by making such arguments. In Frankfurt today he spent more than two hours explaining his case to journalists – a clear sign that he is not going to give up anytime soon. Read more
Two dovish tilts on the MPC and one puzzle
All eyes were on the Bank of England minutes of the June Monetary Policy Committee to see whether the replacement of Andrew Sentance with Ben Broadbent would change the balance on the Committee. It did.
Mr Broadbent voted with the majority not to tighten monetary policy, removing one hawkish voice. The Committee is now broadly split 7-2 against tighter monetary policy. Mr Broadbent’s vote was the first dovish tilt apparent in the minutes. Compared with the harsh Mr Sentance, who voted vehemently for rate rises every month most recently seeking a 0.5 percentage point rise, Mr Broadbent is very cuddly indeed.
The second dovish tilt came in paragraph 25. Read more
| About this blog | Blog guide |
Chris Giles has been the economics editor of the Financial Times since 2004. Based in London, he writes about international economic trends and the British economy. Before reporting economics for the Financial Times, he wrote editorials for the paper, reported for the BBC, worked as a regulator of the broadcasting industry and undertook research for the Institute for Fiscal Studies. RSS
Michael Steen, Frankfurt bureau chief, covers the ECB and the eurozone's economies. He joined the Financial Times in 2007 as Amsterdam correspondent and later worked as a front page news editor in London. Before joining the FT, he spent nine years as a correspondent at Reuters, mostly in foreign postings that included a previous stint in Frankfurt, as well as Moscow, Kiev and central Asia. He read German and Russian at Cambridge.RSS
Robin Harding is the FT's US economics editor, based in Washington. Prior to this, he was based in Tokyo, covering the Bank of Japan and Japan's technology sector, and in London as an economics leader writer. Robin studied economics at Cambridge and has a masters in economics from Hitotsubashi University, where he was a Monbusho scholar. Before joining the FT, Robin worked in asset management and banking. RSS
Ralph Atkins, capital markets editor, has been writing for the Financial Times for more than 20 years following an economics degree from Cambridge. From 2004 to 2012, Ralph was Frankfurt bureau chief, watching the European Central Bank and eurozone economies. He has also worked in Bonn, Berlin, Jerusalem and Brussels. RSS
Claire Jones is Money Supply economics team writer, based in London. Before joining the Financial Times, she was the editor of the Central Banking journal and CentralBanking.com. Claire studied philosophy and economics at the London School of Economics. RSS
