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The vice chairman of the Federal Reserve announced on Monday that he would retire in June, giving President Obama an expanded opportunity to put his stamp on the central bank as it faces a difficult balance between heading off inflation and addressing high levels of unemployment.
Analysts say Chinese leaders acted too slowly in heading off inflation after they deflected the 2008 crisis and growth quickly returned to normal levels.
As banks enjoy a recovery, lending may slow further as the Federal Reserve shifts its focus from spurring growth to heading off inflation, reversing the current period of ultralow interest rates that has been a boon to banks.
The divide makes for tricky navigation by the European Central Bank, which will hold its monthly monetary policy meeting on Thursday, as it tries to promote growth in the ailing countries while heading off inflation in the healthier ones.
Supporters of the Fed's independence have argued the shield provided crucial insulation from political pressure, which would make it much harder for Fed officials to take unpopular action aimed at heading off inflation.
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"It was the first real countercyclical policy to head off inflation".
The action, taken to head off inflation as the country's economy surges, highlighted the diverging growth rates in Europe.
We need lower interest rates in order to head off recession, but higher rates in order to head off inflation.
The Bank of Japan last week joined the Federal Reserve and the European Central Bank in tightening monetary policy to head off inflation.
The figures could add to pressure for higher interest rates in May to head off inflation, economists said.
At the same time, Fed policy makers say they are preparing to reverse themselves to head off inflation.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com