Report
Patrick Artus

Can a central bank conduct a procyclical monetary policy?

The current case of the Federal Reserve is very interesting. While the US economy is giv ing signs of a slowdown: Financial markets do not believe that the Federal Reserve can continue to hike its interest rates; The Federal Reserve has said that it will continue to normalise its interest rates, i.e. to conduct a procyclical monetary policy. Can a central bank really conduct a procyclical monetary policy? That is difficult: Such a policy leads to a pointle ss manipulation of interest rates: they rise when the economy slow s down, and they must then rapidly be lowered ; As we saw in December 2018, a procyclical monetary policy leads to a marked deterioration in equity markets.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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