Compared to the political sphere, developments at the most important central banks are proceeding in an orderly fashion. Nor is this likely to change in the next few months. The European monetary watchdogs recently reset the stage for the further course of monetary policy. Worthy of note in this context is the fact that under current conditions the key rate is to remain unchanged until through the summer of next year. This leaves the ECB’s monetary policy in autopilot mode. Only the “Target2” topic has been the object of controversial debate recently. However, this debate focusses on the wrong points. The liability risks should be placed less to the fore than the question of how confidence in the periphery states can be restored again.
On the other side of the Atlantic the Fed’s monetary policy is also likely to continue to proceed in a very orderly manner. The US monetary watchdogs are currently intent on pulling off a soft landing for the US economy and are therefore gradually tightening the monetary reins. Two more key rate moves are likely to come this year. The September meeting is likely to bring the next interest rate increase. The top dogs at the Bank of England last tightened the interest rate screw in July. While the BoE representatives regard the latest rate move as part of a current rate-hiking cycle, at the same time they are signalling that there will probably not be more than “one interest rate increase a year.” The reasons cited for this cautious stance include the uncertainty surrounding Brexit. With regard to the BoJ there has recently been speculation that it might consider deviating from its ultra-accommodative stance. By introducing a “forward guidance” the BoJ has probably succeeded in stifling premature speculation about it departing from its ultra-accommodative monetary policy for the foreseeable future.