June 17th, 2020
The Big 4 central banks have emphasised once again this week that policy support will be cranked up as necessary as long as the COVID crisis persists and any upward risks to inflation longer-term is the last thing on their minds right now. Andrew Bailey's Bank of England will likely follow suit tomorrow, with the drop in UK inflation in May to 4-year lows - reported today - a green light for further action. Most expect another £100 billion of bond buying to be added. As the pandemic remains in play and before the economies have returned to normal, central banks and governments will be loth to give any impression they are out of firepower as that could easily spook the public and markets alike - dragging on the very recovery they are seeking.
Chart by Ritvik Carvalho and commentary by Mike Dolan
If you liked this, do consider subscribing. It’s free, and delivered to your inbox daily!