Another missed Greek opportunity?

By Mike Peacock
May 11, 2015

Greek Finance Minister Varoufakis leaves the European Commission headquarters in Brussels

What had been billed as another defining moment in the Greek saga now looks like it will be another missed opportunity.

Greece points finger of blame at its creditors

By Mike Peacock
May 6, 2015

Greek Finance Minister Varoufakis leaves the European Commission headquarters in Brussels

After another day of to-and-fro on Greece’s bailout, Finance Minister Yanis Varoufakis said he expected euro zone finance ministers to acknowledge next Monday progress towards a cash-for-reform deal, opening the way to easing Athens’ liquidity crisis.

Monetary policy: New T-shirt needed?

May 1, 2015

San Francisco Fed President John Williams  believes deeply that monetary policy is data-dependent, so much so that he has printed the mantra on T-shirts that he is giving away coast to coast. On Friday at Chapman University in Orange, Calif., however, he didn’t discuss the current state of U.S. economic data or the stance of monetary policy. Instead, he focused on why forcing the Fed to follow a strict monetary policy rule to make interest rate decisions would be, well, a problem ( It’s a view that a number of his colleagues, including Fed Chair Janet Yellen, have publicly embraced. Monetary policy — it’s independent. Sounds like something you could put on a T-shirt.

Russian rates to fall as rouble rallies

By Mike Peacock
April 30, 2015

German Chancellor Merkel and Greek Prime Minister Tsipras leave after addressing news conference in Berlin

Russia’s central bank is expected to cut interest rates today, following a sharp rally in the rouble in tandem with oil’s recovery.

As Fed’s statement shrinks, data looms larger

April 29, 2015

Perhaps the most notable aspect of the Federal Reserve’s April statement is its brevity: at just 560 words, it’s the shortest post-Fed-meeting statement since October 2012.  In saying less about its much-anticipated first interest-rate hike, the Fed is nudging markets to pay attention to other stuff. Like, for instance, the April jobs report next Friday, and the May jobs report one month later. “The Fed is data dependent,” says Eaton Vance portfolio manager Eric Stein. “They’d like to get to a world where the market will react more to numbers rather than Fed meetings and statements.”

Riksbank’s policy dilemma

By Mike Peacock
April 29, 2015

Riksbank Governor Stefan Ingves attends a forum organized by Mexico's Central Bank in Mexico City

Sweden’s central bank delivers its latest policy decision with many analysts expecting a further interest rate cut and an expansion of its new bond-buying programme, reflecting its fear of deflation despite solid economic growth.

Data isn’t as objective as the Fed might have you believe

April 28, 2015

SFFedTshirt.jpgFed officials say they will be “data-dependent” when it comes to making monetary policy. San Francisco Fed President John Williams feels so strongly about it, he’s even printed up a T-shirt to get that message across. But truth be told, data-dependency is not as objective as it sounds. Data doesn’t dictate policy; it’s the interpretation of data that’s key. What is rate-hike-worthy data to one policymaker is keep-the-pedal-to-the-metal data for another. Take, for instance, U.S. GDP growth. Richmond Fed President Jeffrey Lacker says he expects GDP growth to average 2 percent to 2.5 percent this year, a pace that would justify a Fed rate hike in June. Chicago Fed President Charles Evans expects 3 percent growth this year, and does not believe even that would justify a rate hike until the first half of 2016. So what does it tell you about monetary policy if you see GDP growth of 2.5 percent? Not a whole lot, judging from these two. And the statements of other Fed officials are hardly more helpful. Indeed, as Atlanta Fed President Dennis Lockhart said recently, “I don’t think it is advisable to approach such a decision with rigid quantitative triggers in mind.” Watch the data, sure. But don’t assume the data will tell you much about the exact timing of the rate hike. Monetary policy – it’s subjective. Maybe some policymaker will print that on a T-shirt.

David Cameron’s stick or twist dilemma

By Mike Peacock
April 27, 2015

Britain's opposition Labour Party leader Ed Miliband speaks at an election campaign event in north London

To a collective sigh of relief, Britain’s political parties enter their last full of week of campaigning ahead of May 7 elections. There have been endless talking points but as yet no turning point.

EU thinks again on Mediterranean operations

By Mike Peacock
April 23, 2015

Amnesty International volunteers place hundreds of ships with the writing "SOS Europe" on the beach of San Sebastian in Barcelona

EU leaders will hold an emergency summit in Brussels in response to a grimly increasing death toll among migrants trying to cross the Mediterranean from north Africa in search of a better life.

Some progress cited in Greek talks, but not enough

By Mike Peacock
April 22, 2015

Greek Finance Minister Varoufakis walks past  Eurogroup Chairman Dijsselbloem at a euro zone Finance Ministers meeting in Brussels

Euro zone finance deputies are due to hold talks today on how to rescue Greece but appear to have little concrete to work on with Athens yet to produce a new economic reform programme after the first one was declared full of holes.