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In the future, they argue, any euro-zone fiscal rules should take into account large capital inflows and require that fiscal policy tighten in response to them in order to prevent dangerous shocks.These commenters have a point; Spain's fiscal balance created a false sense of comfort unjustified by the gross capital flows facing its economy.
In effect, it serves to limit monetary policy, tighten credit and stifle exports.
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But analysts forecast more monetary policy tightening — albeit at a more moderate pace — this year.
So I think there is a very aggressive monetary policy tightening in China.
This is not the first time Carney has tried to telegraph an imminent policy tightening.
The reality is that limited monetary policy tightening by a few central banks hasn't checked global growth much.
With American monetary policy tightening, and other central banks still loosening, investors can make higher returns from dollar-denominated assets.
Given market concerns about the Eurozone fiscal position combined with significant fiscal policy tightening from the US this risks further delay in monetary policy tightening, which should help limit the rise in US Treasury yields.
"However, yesterday's GDP figures could well dissuade the waverers from rushing into a premature policy tightening.
We're seeing rising interest rates, monetary policy tightening, and that's going to change the growth rate and the way that people can borrow.
Some of that slowdown was the result of policy tightening to cool overheating economies and curb inflation, but it also reflects weaker exports and reduced capital inflows.
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