macroVS Episode 17: All about the US debt ceiling & EU military spending
Plus: the nexus between financial stability and monetary policy comes into focus
eing a central banker is a thankless job. People get upset when inflation rates increase but the only tool at your disposal to address the problem is to increase interest rates. Every time a bank experiences liquidity pressure, you have a fire drill and then people complain that you used government funds to quell the problem. You do your best, and then politicians spend money they don’t have, increasing inflation despite your best efforts and distorting markets.
It is a sign of the times when the rate hikes in Australia, the ECB, and the United States are the side show.
This Episode 17 focuses on the details that may have been missed in the news cycle regarding interest rates. In particular, we take a deep dive into the debt ceiling details, EU military spending details, and we look at how central bankers increasingly admit that financial instability can, indeed, drive monetary policy.
Let’s start with the Chart of the Day….debt ceiling policy risks quantified.
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