Mark Carney and colleagues have no margin for mistake
Not the words provide the clearest explanations. Having voted by nine votes out of nine for hiking the official Bank rate, the BoE Monetary Policy Committee got up all the skeptic noses, who claimed such decision to be wrong. According to Mark Carney, the monetary policy should walk. Not stand still. Not run. That is how the Bank of England governor worded the necessity of the gradual monetary normalization. He made another step towards normal interest rate. A step, he may be beheaded for.
The British media can’t still excuse Mark Carney for his nationality. How can the Bank of England be governed by a legionary??? Sarcastic allusions that the 53-year Canadian will see the interest rate at the normal level before he dies were replaced by the criticism of the unreasonable decision to move the official bank rate up to 0.75%. Say, even when the BoE tightened its monetary policy in 2016, there were some reasons, like the risks of the U.K. economy’s slowdown after the referendum on Brexit. Now, there are no reasons for it, according to the voters. Tabloids may want to see the governor taking a nap. Like, I’m sleeping like a corpse. I have even been chalked off a few times.
Following the press conference, I got a feeling that Mark Carney used to like trading. His words “The mistake is to always wait, wait, wait, until you have perfect certainty” is quite appropriate for real trading. First, such state may never occur. Second, if it occurs, it won’t guarantee to work out. Obviously, BoE governor, like a de-miner, has no margin for mistake. If the central bank’s strategy proves to be efficient, he won’t be praised loudmouth. They are likely to say nothing. Anyway, do saints need thankful words? I am an angel, honestly. It is only because I ride a broom faster.
I, personally, respect the skill to apply allegories. A loose lace is fraught with a fall in the end. As well as a loose tongue. The phrase "There's a wide range of Brexit outcomes, but in many of them, interest rates will be at least as high as they are today. So we [BoE] don't need to keep our powder dry for that” means a lot. If the divorce turns out to be hard, they can always loosen the monetary policy; now they need to act according to the current situation. It suggests that the average wage is rising faster than the productivity of British workers, and so, inflation rate is likely to increase. This CPI tendency must be stopped at its origin.
The British media are referring to other central banks, which do not obey the markets. For example, the Bank of Japan has made no changes in the yield curve control policy despite the expectations. The Fed is not that fast to hike the rate in spite of a faster CPI rate, at 2.9%, and the unemployment rate at the lowest levels over a few decades. Tabloids are stubborn to feast the ears with only silence. I have just a single question. If England can’t put up with the idea that the world’s oldest central bank is headed by a legionary, why not replace him with an Englishman? And there is a happy woman again. A new man, and there you are! Again, clever, beautiful, and a perfect cook...
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