Money talks, and at the 2024 Bund Summit in Shanghai, it was a full-on conversation! 🗣️💸 This past Saturday, the summit wrapped up with some of the world's financial heavyweights sharing their thoughts on where global monetary policies are headed.
Global Economies on a Tightrope 🎪
With the economic outlook looking as clear as a foggy morning 🌫️, countries are juggling different monetary policies to keep their balance.
USA: Ready to Ease Up? 🇺🇸
Donald Kohn, former vice-chairman of the U.S. Federal Reserve, hinted that the Fed might be switching gears soon. 🚦 He said they're about to move from a \"restrictive\" policy to a more \"easing\" one, much like other central banks. Inflation has dipped a lot over the past few years 📉, though it's still shy of that 2% target 🎯. Plus, the job market is chillin' 😎 after a hot streak in 2021-2022.
Europe: Inflation on the Run 🇪🇺
Jean-Claude Trichet, ex-president of the European Central Bank (ECB), noted that the ECB jacked up rates 10 times, while the U.S. did it 11 times. Talk about serious moves! 🏃♂️💨 He mentioned that in June, the ECB cut rates by 25 basis points, and inflation slid down to 2.5%. But here's the twist: core inflation is still hanging at 2.8%, higher than the 2% goal. Not cool, core inflation! 😤
Japan: The Comeback Kid 🇯🇵
Kuroda Haruhiko, former governor of the Bank of Japan, shared Japan's unique journey. After battling deflation from 1998 to 2012 🥊, Japan set a 2% inflation target in 2013 and fired up some Quantitative and Qualitative Monetary Easing (QQME) magic ✨. Fast forward, and things changed big time when the Ukraine conflict kicked off in 2022, causing commodity prices to soar 🚀 and the yen to drop 📉. In 2023, inflation hit 3%!
Now, the Bank of Japan is normalizing monetary policy, bumping the short-term rate from -0.1% to 0.1% 📈. Haruhiko says they'll keep hiking rates gradually toward a neutral rate between 1% and 2%. Slow and steady wins the race, right? 🐢🏁
What's Next? 🔮
As these former central bankers shared, the world of money is always spinning 🌀. With different challenges and strategies, it's like a global game of chess ♟️. But one thing's for sure: we'll be keeping our eyes peeled 👀 on how these policies play out!
Reference(s):
cgtn.com
