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So it's not too surprising that the Fed's monetary policy moves reveal little about soon-to-be released statistics on inflation in the recent past.
The Bank of Japan "has reached its limit in terms of conventional monetary policy moves," said Norihiro Fujito, general manager at Mitsubishi UFJ Securities.
But the jury is still out on whether the Federal Reserve Board chairman's anticipated monetary policy moves will turn around the economy -- and stock prices -- as quickly in 2001 as they have in periods of distress throughout the 1990's.
FRANKFURT — The European Central Bank left its main interest rates and stimulus tools unchanged at its meeting on Thursday, with its president forcefully arguing that the bank's aggressive monetary policy moves had bolstered economic growth and warded off negative inflation in the eurozone.
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The Bank of Mexico raised the overnight rate to 7.75percentt, from 7.5percentt, in its first monetary policy move since last October.
Instead it announced that it would achieve the interest-rate cut through a sharp change of course in its monetary policy, moving towards an outright expansion of the quantity of money, rather than fixing the interest rate.
You know, this is a pretty coordinated monetary policy move around the world.
Tyler Cowen offers a different explanation: it was monetary policy that moved things.
Textbook Keynesian economics (literally: think Dornbusch-Fischer and Gordon) had comfortably incorporated inflation expectations, while the persistence of recessions and the evident ability of fully anticipated monetary policy to move the real economy had made Lucas-type models unsustainable.
But there is a risk once again that monetary policy is moving faster than political leaders are able to create the institutions, such as a European bank supervisor, needed to ensure the survival of the common currency.
"I just wanted to touch briefly on monetary policy before moving on to the Libor scandal," Senator Patrick J. Toomey, Republican of Pennsylvania, said, in an amusingly frank acknowledgment of the hearing's focus.
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Justyna Jupowicz-Kozak
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