Hello, Welcome to Known Unknowns, a newsletter about risk in the economy, especially the risks we pose to ourselves. Let’s Talk about Monetary Policy In the last two weeks, both the ECB and the Fed cut rates. The ECB is even resuming quantitative easing, buying long-term bonds, while the Fed will just let its balance sheet grow naturally. To be honest, I am not sure any of it matters. If a trade war takes the global economy into a recession, a 25 or even 50 basis point rate cut isn’t doing to do much. It is probably just signaling that the Central Banks are on it.
Known Unknowns
Known Unknowns
Known Unknowns
Hello, Welcome to Known Unknowns, a newsletter about risk in the economy, especially the risks we pose to ourselves. Let’s Talk about Monetary Policy In the last two weeks, both the ECB and the Fed cut rates. The ECB is even resuming quantitative easing, buying long-term bonds, while the Fed will just let its balance sheet grow naturally. To be honest, I am not sure any of it matters. If a trade war takes the global economy into a recession, a 25 or even 50 basis point rate cut isn’t doing to do much. It is probably just signaling that the Central Banks are on it.