How to benefit from others’ QE — Hong Kong Linked Exchange Rate’s lesson
What if I tell you, behind the boring news headline, there is actually a wonkish story about how the Hong Kong central bank took advantage of the monetary easing by the Fed in the last 12 year and created a new set of policy options that it can now use to actively mange the inflows created by the new round Fed easing under the Great Lockdown.
The repo spike is not liquidity crisis; it is a crisis for Fed’s floor...
The floor system needs a cap on top of it. The sooner the Fed realizes it, the better they will be prepared for the coming financial turmoil.
Bank of Canada drops interest rate to 2.5% — also a risk management cut
After holding the policy rate unchanged in the past three meetings, Bank of Canada on Wednesday resumed its rate cut cycle, lowering its target for the overnight rate by 25 basis points to 2.5%.
Should the Fed and BoC look through the World Cup employment boost?
The important question, however, is this: shouldn't the Fed and Bank of Canada look through such a one-off, short-term World Cup employment boost?
Why Canada’s unemployment rate is rising so rapidly?
Canada's labor market has cooled down rapidly this year. Unemployment rate rose to 6.6% in August. The major issue is that the not enough job are created to digest the explosive population growth over the last few years and this integration problem is growing larger every month.
Hold on, Bank of England: The Fed is not so different from you on...
The Bank of England on Thursday released its latest Monetary Policy Report, announcing its decision to lower its policy rate by 25 bps to 4%. The report contains a lot of excellent analysis, including on the recent rise in food prices, the effect of trade war as well as a review of its quantitative tightening policy.
But one thing, a comparatively much less important thing, in the review just stuck in my mind...
Why is the Hong Kong-US interest rate spread so persistent? — Currency peg in...
A spread of over 3.5 percentage points between US and Hong Kong Interest rate persisted for close to two months and so far arbitrage has failed to close the gap, leading to discussion of whether Hong Kong's Linked Exchange System is failing. This article, however, will explore some technical factors behind this interesting interest rate gap.
The Fed’s ‘leaky ceiling’ problem
Why is the Fed's SRF failing? Top Fed officials called the issue a "leaky ceiling" that doomed Quantitative Tightening (QT). Learn how low bank participation and the leaky floor analogy suggest new policy changes.
‘Unusually low’ Hong Kong interest rate is a policy choice*
A careful study of Hong Kong's currency peg that explain why the current low-interest rate environment can be interpreted as a result of the Hong Kong Monetary Authority's policy choice.
If the Fed ends QT too soon, it risks discrediting its ceiling tools
Analysts are expecting the Federal Reserve to announce the end of quantitative tightening (QT) at the upcoming meeting this week. The speculation is fueled by Chairman Jerome Powell's speech earlier this month in which he mentioned the supply of reserves may reach an "ample" level "in coming months."
Helicopter Money is here in Hong Kong? Well…
“The money helicopter has arrived,” Claire Jones writes in her FT Alphaville post, citing Hong Kong Finance Secretary’s announcement of a handout of HKD...
A User’s Guide to Tariff Accrual Compensating Obligations
On the accidental invention of a new fiscal instrument, its structural advantages over existing debt ceiling workarounds, and the question of whether the next...
