This week will be interesting for the markets, as many regulators will make decisions on monetary policy.
In particular, the Fed will publish a press release on Wednesday, the Bank of England on Thursday, and the Bank of Japan on Friday.
The three largest regulators over the past month faced the same problem: growth in government bond rates. Will their reaction be the same?
According to Jerome Powell's comments, the Fed will hold on to a wait and see attitude for now, despite another stimulus package and vaccinations. I think there will be no changes in policy, and the regulator will continue to buy securities for $ 120 billion monthly.
An interesting part of Wednesday evening will revolve around the Fed's updated forecasts, as well as Jerome Powell's views on the issues at the accompanying press conference. I fully admit that in connection with the aid package, the forecasts for the US economy will improve, and due to rising inflationary expectations, some committee members may expect a rate hike earlier.
The Bank of England, like the Fed, is not expected to make significant policy changes. At most, we can hear from the regulator concern about the growth of rates.
But the Bank of Japan may well give less gentle comments. Many expect the regulator to cancel promises to buy ETFs in the amount of 6 to 12 trillion yen. Perhaps this is an attempt to reduce the role of the Bank of Japan in the market for risky instruments. Nevertheless, I would not expect the control of the yield curve on Japanese government bonds to be canceled yet.
Conclusion: Central banks will do their best to calm the market. But this has never stopped the market from unexpectedly disappointed. I think the week will be quite nervous.
Submitted March 16, 2021 at 06:57AM by SirFuckingLoin https://ift.tt/3rSgPOZ
