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Monetary policy (times three)

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  • The Fed dominates, but with an FOMC divided as to the timing (if not the direction) of policy it is hard to make emphatic assertions - not that this fact has stopped the media from trying. We believe that the statement will note lower inflation, and maybe the better economic growth data.
  • The Fed Chairman's interaction at the press conference is likely to stress that the start of a reduction in liquidity injections does not determine a path, and that policy can be flexible (in both directions). These are statements the Chairman has made before, and made recently.
  • The Bank of Japan's Kuroda has been testifying that monetary policy is helping bank lending. What he failed to mention is that the evidence indicates it is helping bank lending outside of Japan, not inside Japan.
  • The Bank of England has an embarrassment of riches today - minutes, the BoE agents' survey and the mansion House speeches of the Chancellor and Governor (the last time for the current governor - next year's speech will have a Canadian accent).
Listen to the audio version of this briefing.