Today News Journal
    What's Hot

    The Colorado River Is Disappearing. Here’s How to Replenish It.

    February 5, 2023

    Fake Meat’s Beyond Impossible Quest to Win Over Americans

    February 5, 2023

    Here’s How Finland, Sweden and NATO Should Deal With Erdogan

    February 5, 2023
    Facebook Twitter Instagram
    Facebook Twitter Instagram
    Today News Journal
    Contact Us
    • Home
    • Trending
    • Business
    • Health
    • Technology
      • Automobile
      • Gadgets
      • Mobiles
      • Robotics
    • Lifestyle
      • Culture
    • Sports
    • Travel
    • Editorials
    • News
      • Politics
    Today News Journal
    Home » News » Who Is Afraid of the Big Bad Rate Pause?
    News

    Who Is Afraid of the Big Bad Rate Pause?

    James MartinBy James MartinJanuary 10, 2023No Comments5 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp VKontakte Email
    Share
    Facebook Twitter LinkedIn Pinterest Email



    Comment

    Who is afraid of the coming halt to interest-rate hikes? Far from breathing a sigh of relief, central bankers will struggle to convey that this is a good thing. They may almost not believe it themselves. As Bank Indonesia Governor Perry Warjiyo puts it, this is a time of sleepless nights.

    Monetary chiefs will be at pains to stress the tussle against inflation isn’t over and there is more work to do — even as their next steps are likely to be smaller increases and then pauses. But the issue isn’t whether the battle is won; few people are ready to declare peace. It’s that the bulk of the work is now done. If only they could bring themselves to say so. Scarred by the way prices galloped away from them, policymakers will talk tough even when their actions suggest otherwise. The slowdown in growth matters, though officials will try to sound like it doesn’t.

    Such messaging challenges are likely to be on display this week when South Korea sets borrowing costs. One of the first authorities to hike, in August 2021, the Bank of Korea is approaching a pivotal moment. Most analysts foresee a final quarter-point increase before officials catch their breath, while a significant minority pencil in an early pause. How to signal that such a surprise doesn’t presage cuts or the all-clear on prices? A “hawkish hold” is what Citigroup predicts, with a couple of dissents from folks who might prefer an extra 25 basis points of tightening this time.  To accomplish this, the commentary and press briefing by Governor Rhee Chang-yong will probably be cluttered with resistance to the very idea of a reduction and emphasize the possibility — albeit remote — of resuming increases down the road. A recalibration of this scope is largely a matter of timing rather than substance at the Federal Reserve. Bloomberg Economics sees two quarter-point hikes from the Fed, and then nothing for the rest of the year. Chair Jerome Powell is likely to accompany this shift with hard talk on inflation, just as he did when the Fed scaled down to a 50 basis-point move in December. 

    Communication will be a vital component of the economic story of 2023. At the panel in Bangkok last month where Perry riffed on insomnia, Reserve Bank of Australia Governor Philip Lowe lamented the end of a long chapter of relatively low and stable inflation. This more volatile era is bound to feature repeated failures to contain price pressures. The trick will be to resolutely bring it back to target over the medium term so consumers and businesses are confident that the next surge will be addressed as well, and the one after that. Enduring pain to achieve that result is one thing, how to relay the necessity of discomfort is another.Over the decade prior to the pandemic, officials became adept at advertising what they would do way in advance. Forward guidance came a cropper, however, in 2022. The tool may recover, but in a stripped-down form. The trouble is that modern communications — press conferences, dot plots, forecasts — are all byproducts of the greater transparency that is inherent in signaling the course of monetary policy. The shocks of the past 18 months don’t exactly encourage policymakers going out on a limb. European Central Bank President Christine Lagarde wrestled with this at the Bangkok seminar hosted by the Bank for International Settlements and the Bank of Thailand. She described a public-relations task from hell:

    What I find particularly challenging with the kind of communication that we have to use, and which is one of the key tools that can be exploited, is that it leads you to being very schizophrenic. You address a particular audience, which is attentive to every single word, comma, inflection of voice, movement of your eyebrows, different calibration… And then you have the other audience that doesn’t understand anything that you have said to the first audience, and yet that second audience has to be convinced as well because inflation expectations, of course, are the product of all these wonderful forecaster surveys and professional da da da, but it’s also going to be the consumers’ expectations that will drive the show. It leads you to having to try to avoid inconsistencies between these two languages that don’t talk to each other and those categories of audiences that ignore each other. 

    That kind of tension is no doubt on Lowe’s mind as he wrestles with calls for more regular press conferences and braces for the findings of an independent panel reviewing the RBA on behalf of the government. Just about every other central bank of consequence runs the media gauntlet on a scheduled basis. What Lagarde didn’t say, but that hangs over messaging from the Fed, ECB and, to a lesser extent, Bank of England, is figuring out who to listen to. More words don’t always make the stance clear, but it can sure help if you can figure out who matters.

    Today’s central bankers have certainly lived through periods of high inflation. It’s not so alien they have completely lost their bearings. They did, however, ascend to professional heights during too-low inflation. Can they make the leap while keeping the confidence not just of investors, but of the political class on whom their independence rests? I would give a few basis points to hear Rhee rehearse his remarks for Friday.  

    More From Bloomberg Opinion:

    • Disappointing Economy Doesn’t Mean Disaster: Daniel Moss

    • Goldilocks Makes an Appearance in Jobs Market: Robert Burgess

    • Consumer Christmas Cheer Won’t Last Very Long: Andrea Felsted

    This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously, he was executive editor of Bloomberg News for economics.

    More stories like this are available on bloomberg.com/opinion



    Source link

    Related posts:

    1. Supersonic Passenger Jets Are Back? Not So Fast
    2. Russian Dissidents Aren’t In France for the Food
    3. England’s gardeners to be banned from using peat-based compost | Environment
    4. ‘I’m a Tory, get me out of here’: MPs ponder life after parliament | Conservatives
    Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
    Previous ArticleFootball Australia hit Melbourne Victory with record $550,000 fine for derby pitch invasion | Soccer
    Next Article Championship top scorer odds with rejuvenated Hull City star Oscar Estupinan in the running
    James Martin
    • Website

    Related Posts

    The Colorado River Is Disappearing. Here’s How to Replenish It.

    February 5, 2023

    Fake Meat’s Beyond Impossible Quest to Win Over Americans

    February 5, 2023

    Here’s How Finland, Sweden and NATO Should Deal With Erdogan

    February 5, 2023

    What Europe Risks With Wider Sanctions on Russian Oil

    February 5, 2023

    Leave A Reply Cancel Reply

    Search
    Categories
    • Automobile
    • Business
    • Coronavirus
    • Culture
    • Editorials
    • Finance
    • Gadgets
    • Health
    • Lifestyle
    • Mobiles
    • Money
    • News
    • Politics
    • Sports
    • Technology
    • Travel
    • Trending
    • World
    Latest Posts

    The Colorado River Is Disappearing. Here’s How to Replenish It.

    February 5, 2023

    Fake Meat’s Beyond Impossible Quest to Win Over Americans

    February 5, 2023

    Here’s How Finland, Sweden and NATO Should Deal With Erdogan

    February 5, 2023

    What Europe Risks With Wider Sanctions on Russian Oil

    February 5, 2023
    • Facebook
    • Twitter
    Don't Miss
    News

    The Colorado River Is Disappearing. Here’s How to Replenish It.

    By James MartinFebruary 5, 20230

    Comment on this storyCommentThe Colorado River has gone nearly dry the way Mike Campbell in…

    Fake Meat’s Beyond Impossible Quest to Win Over Americans

    February 5, 2023

    Here’s How Finland, Sweden and NATO Should Deal With Erdogan

    February 5, 2023

    What Europe Risks With Wider Sanctions on Russian Oil

    February 5, 2023
    • Facebook
    • Twitter
    About Us

    Hello friends, I am James Martin. Welcome to my blog todaynewsjournal.com. We are a team of experienced journalists who are passionate about delivering the latest news and current events to our readers. Our editorial team is dedicated to providing the most accurate and up-to-date information possible. We aim to be your go-to source for news and current events. Here on this site, You will get up to date information regarding all important categories like business ideas, health tips,... (Read More)

    Latest News

    The Colorado River Is Disappearing. Here’s How to Replenish It.

    February 5, 2023

    Fake Meat’s Beyond Impossible Quest to Win Over Americans

    February 5, 2023

    Here’s How Finland, Sweden and NATO Should Deal With Erdogan

    February 5, 2023
    SIGN UP NEWSLETTER

    Join The Conversation sign up to receive emails for The Daily special tips general info.

      Facebook Twitter Instagram Pinterest
      • Home
      • Editorials
      • Get In Touch

      Copyright © 2021-2023 · Today News Journal Privacy Policy

      Type above and press Enter to search. Press Esc to cancel.

      We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
      Cookie SettingsAccept All
      Manage consent

      Privacy Overview

      This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
      Necessary
      Always Enabled
      Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
      CookieDurationDescription
      cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
      cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
      cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
      cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
      cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
      viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
      Functional
      Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
      Performance
      Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
      Analytics
      Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
      Advertisement
      Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
      Others
      Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
      SAVE & ACCEPT

      Sign In or Register

      Welcome Back!

      Login to your account below.

      Lost password?