Central Banks latest publications
Continuous innovation and the gradual decline of the use of cash are giving way to a new digital monetary system. Central banks must define the new role they will play coming out of this transformation.
Central banking forums are particularly interesting, providing as they do an environment where one can take a step back from the volatile present and, even more importantly, take perspective and ask oneself where it is that we are heading.
We do not agree with Banxico’s overly hawkish tone; we think they should cut rates but they will not. We estimate the next move to be a cut, in September.
After weeks of disappointing data, rising trade tensions and renewed fears of slower global growth, the Fed set the stage for a monetary easing cycle, in line with our view.
Just under a year ago, the Federal Reserve (Fed) began a process to review its monetary policy strategy, tools and communication practices.
Models suggest more than 70% probability of recession within the next 24 months. Shadow banking, business debt and risk appetite represent major red flags. Dovish Fed response has potential to negate downside risks in short-term.
The ECB strengthened its forward guidance on rates, with no rate hikes at least through the first half of 2020 in response to the increase and persistence of global uncertainty. The ECB opens the possibility to further easing if needed.