Report
Patrick Artus

What are central banks interested in?

Central banks (we look at the cases of the Federal Reserve and the ECB) can have three types of objectives: Their traditional domestic objectives: inflation, cyclical position, i.e. the Taylor rule; The objective of stabilising asset prices (equities, real estate) or debt (overall, this is "leaning against the wind"); External objectives, concerning the effects of the country’s monetary policy on other countries: stabilisation of exchange rates or other countries’ interest rates. Which of these three groups of objectives does the Federal Reserve and the ECB take into account? We see: No external objective for the Federal Reserve; No asset price objective for the ECB; A debt objective in both cases; An exchange rate objective for the ECB.
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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