Reports on the death of the present cycle of politically motivated monetary easing, in the words of Mark Twain, grossly exaggerated. Contemporary market analyses are full of how the Fed and ECB are dialing back on previous hints of Spring 2024 rate cuts. In tune with this, commentators are lauding the central banks, especially the Fed, for a show of political independence as elections approach.
The bigger picture though suggests otherwise. In the economic aftermath of the pandemic, monetary policy has again been blatantly political.
Yes, in both the US and Europe, central banks have had the chutzpah to claim credit for slowing down the rise of consumer prices. The truth is they have taken advantage of the supply boost from fading pandemic dislocations to pursue continued—but now partially
2024-02-21