To say that it has been a wildly volatile year for financial markets would be an understatement … and we are only in mid-February! Indeed, it has been quite a while since we have seen such intra-day fluctuations — up and down — in stocks, bonds, and oil.
Unsurprisingly, this volatility has unsettled many investors, contributing to growing financial insecurity. If it continues, it would also risk aggravating economic insecurity, undermining growth potential and fueling political debates.
All this serves to place an even brighter spotlight on central banks — from the Federal Reserve and the European Central Bank to the Bank of Japan, the People’s Bank of China and others. For example:
- Some observers argue — wrongly in my opinion — that the volatility in financial markets is the result of the Federal Reserve’s decision in December to raise interest rates by 0.25%;
- Some — and, I suspect, way too optimistically in my opinion — think that central banks can just push a policy button in order to restore market calm in a durable fashion; and
- Too many politicians around the world have delegated economic governance to central banks that only have partial tools to tackle the consequential challenges facing the global economy.’
- http://www.huffingtonpost.com/mohamed-a-elerian/a-quick-central-bank-prim_b_9236730.html
#AllTheNews 