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  • Lagarde: Monetary policy in a new environment

    From ecb.europa.eu

    It is a pleasure to speak to you this morning. When the former British Prime Minister Harold Macmillan was asked what the greatest challenge was for a statesman, he is said to have replied: “Events, dear boy, events”. And indeed, as policymakers, we are constantly faced by unpredictable events and shocks. But what makes the situation we face today especially challenging is that we are not only facing a sequence of ill-fated events – the pandemic, the energy crisis, Russia’s unjustifiable invasion of Ukraine and high inflation – but that as a result, the environment around us is also changing. Some of the ... (full story)

Shut up and put rates up, you bloody fraud!
People here only think about bloody market and Euro going up or down (making pips). These people make decisions which influence hundreds of millions of people. It is not as simple as “just put rates up.” There are so many factors that they have to consider before making such decisions. Euro rates is just one of them and not one of the main for sure.
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Dovish.
Quoting Cdfx
People here only think about bloody market and Euro going up or down (making pips). These people make decisions which influence hundreds of millions of people. It is not as simple as “just put rates up.” There are so many factors that they have to consider before making such decisions. Euro rates is just one of them and not one of the main for sure.
You don't say (he said very sarcastically).

Society/goverment can't afford higher rates. They've snookered themselves. It has always been as simple as "just put rates up". The fact that they raided the cookie jar and put it off for so long is the reason it's no longer in their control.

Lagarde should be in prison.... not chatting garbage.
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Quoting ww3361
{quote} You don't say (he said very sarcastically). Society/goverment can't afford higher rates. They've snookered themselves. It has always been as simple as "just put rates up". The fact that they raided the cookie jar and put it off for so long is the reason it's no longer in their control. Lagarde should be in prison.... not chatting garbage.
Dovish.
Calling it a new environment is just trying to escape her responsibilities, if we only needed her when things are good we really didn't needed her at all. This is the main problem with certain leaders.

Sure this is complex, but not raising rates and tackling inflation is a horrible mistake that only makes everything worst.
I'm going to go out on a limb here for a moment and be controversial: it lies at the heart of what the masses think of their relationship is with government and, to a degree, the consequential health of democracy, in the light of majority ignorance of global and macro-economics.

In a totally-controlled economy, be it communist, totalitarian or just authoritarian there is little expectation in the population majority of being able to carve out a better future nor having a say in how to progress. The 'contract' is that the government looks after them from cradle to grave, with some basic needs supplied. Tomorrow will at least be the same as the basic of today. Reliable but not exciting and contrary to human nature to want to improve tomorrow for yourself and future generations.

In a socially-democratic and capitalist society the contract is never really written or understood: it is constantly changing and being moved by various forces from one day to the next. This ensures good things like dynamism, adaptation, the prospect of improving prosperity and so forth, with the opportunity for everyone to feel that they are working towards a better tomorrow. but it also has negative consequences.

For most of this Millenium the balance of the leverage in that moving construct in 'the West' has largely shifted and one of the reasons for it is that populations have seen how clamour about the 'tough decisions' that democratically-elected politicians make can be tipped hugely by the demands of the masses of 'entitled' individuals. Now the masses know that there is no end to the money-printing machine, despite any protestations from some, and no end to placing today's burden on future generations. This has, therefore, swollen the electorates' perception that government can always just pay more, fund more and if they don't then they must be outed as cruel, uncaring, heartless people. The masses believe that all that extra money they demand from government is of course not theirs but someone else's, that just taxing the rich or the top % is always the answer, without realising how the unintended consequences of removing good, productive capital from the economy further sways the balance of cost in the economy against productive capital, which means the process of a death spiral just gets quicker. Electorates will always clamour for higher taxes, particularly if it doesn't affect them, if they think the 1% will always pay. Personal responsibility and Entitlement (read that as the Welfare State) are opposing forces and just now I'm not sure that Western governments have any will (as the sword of Damocles hangs over them/need to remain in power) to put up resistance or educate on the problem with that balance, if future prosperity is to be realised an not just an assumed notion.

Personal responsibility as a concept is fast going out the door and genuine capitalism is under siege with the prospect of a future of growing prosperity for everyone moving off over the horizon.
Sorry. the Autumn Statement had revaled just how Fked up the UK economy is 2 years after implementation of Brexit TCA. Revealed the spin, disinformation of Ministers and Tory controlled Press Media, Parroting an ideologically driven LIE and DENIAL dominated culture. Its all Ukraine, its all Covid, ..Nothing to do with Brexit nah.. that was 6 years ago??? And totally denying the standing OBR, IFS and BoE -4% growth cost arising from BJs and his ERG buddies Ultra Hard Brexit TCA.

No - dont know if alternative party government would be any better..

..but without political accountability theres no democracy. When Ministers continue to lie with impunity to the people, and with support from partisan media then its time to kick over the table. And demand better accountability.

When TRuss came up with her Fantasy MiniBudget, without a FACT CHECK from OBR,
The markets wouldnt have it.. End Truss.
Yet when UK audiences get flimflamed daily by Ministers, denying impact of BJs disasterous TCA, Oh..thats fine.. ?
Time VOTERS DEMANDED similar accountability as Market do.. on all Ministerial Media spin.(LYING)
Compulsory FACT CHECKING on ALL ministerial statements, interviews and media appearances.

The Market doesnt take shit. Why should Traders? Why should voters?

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Quoting RossEdwards
Sorry. Just so much spin, disinformation and Tory controlled Press Media Parroting of a LIE dominated and without dispute a most seriously discredited regime. No - dont know if alternative any better.. but without political accountability theres no democracy. {image}
Is this a response to my entry? If so I'm not sure I achieved the prompt for debate I was hoping for.
I wish to make it clear I wasn't making anything of any political party, left, right or whatever. Just that I see productive capitalism on the wane, here in the UK arguably as much due to Tory Governments as any other, especially as there hasn't been any other for over a decade anyway.
I'm not advocating an alternative to democracy nor political accountability: genuine democracy is the best of all formats to allow progress. I was merely thinking about where we're all travelling and how the masses think. If there is only one group-think in the masses, it won't matter how many other forms of media pronounce differently, the masses will still get the same result.
The future demographics for the West aren't great for genuine productive growth either.
It's a challenge for The West, not just the UK. My comments weren't actually UK-specific.
Quoting DaJoWaBa
{quote} Is this a response to my entry? If so I'm not sure I achieved the prompt for debate I was hoping for. I wish to make it clear I wasn't making anything of any political party, left, right or whatever. Just that I see productive capitalism on the wane, here in the UK arguably as much due to Tory Governments as any other, especially as there hasn't been any other for over a decade anyway. I'm not advocating an alternative to democracy nor political accountability: genuine democracy is the best of all formats to allow progress. I was merely...
@DJWB.. Relax..
IF I was responding directly to your post I would have QUOTED IT?

However like you I was just floating out an idea, a perspective of MY OWN .
Rather as you did in your post?

My comment was focused on the UK mess which is currently in immediate focus to GBP traders and investors, and appears to be poorly covered by FF-Newsstand in their news aggregation in this forum.

You can fool some of the people all of the time.. and all of the people some of the time..
BUT..not...
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Quoting RossEdwards
{quote} @DJWB.. Relax.. IF I was responding directly to your post I would have QUOTED IT? However like you I was just floating out an idea, a perspective of MY OWN . Rather as you did in your post? My comment was focused on the UK mess which is currently in immediate focus to GBP traders and investors, and appears to be poorly covered by FF-Newsstand in their news aggregation in this forum. You can fool some of the people all of the time.. and all of the people some of the time.. BUT..not...{image}
If this downturn is all about Brexit, how come eur/gbp stays flat, and inflation stands at the same level as the EU average,
But inflation is much higher in some EU countries, say the Netherlands at over 14% right now, a darling EU country just across the water.
If anyone believes the OBR, how come they never reacted to their report?
Not one party is talking about Brexit V an unreliable poll you bring to the table.
#doyourownanalysisordietryin
Ok.
Ugh, that old potato.
On that spectrum I'd repeat, IF Covid and Ukraine hadn't impacted, who's to know what might be the result? It might be the same or worse or much better; we can't know. It's a bit like saying that Brexit was the cause of Covid or Ukraine. It wasn't, so it's a separate issue.
The current 'mess' is attributable to many things, so it really is disingenuous to seek to make it out to be all Brexit dependent or that if only Brexit hadn't happened everything would be fine and dandy because it wouldn't.
We have to look forwards, not backwards and comparing like-with-like is nigh impossible, even if desirable.
Aaah hell stop the delusion guys.
BOTH BoE and OBR projected CLEARLY that The Hard Brexit TCA negotiated and much feted, by the JMG brigade.. would result in a SIGNIFICANT reduction in UK economies GDP growth potential. They both, have since made it clear that none of the other headwinds Ukraine.CV19, have in ANY WAY changed their assessment of that underlying drag on the UK economy going forward.

No Bones this downturn is NOT ALL ABOUT BREXIT. Thats a misrepresentation of my point.
Its about how the UK has had to step up to the challenges of CV19/Ukraine, from a situation already weakened from the ideologically motivated Hard-TCA dictated by BJ ERG.

How ridiculous to hear Truss (Voted in by the Conservative party faithful) call her fantasy MiniBudget as being all about Growth-Growth-Growth? while the OBR and BoE, projections for result of BJs Brexit TCA was to significantly choke growth (up to 4%)
Soor ..IMHO..folk in ideological delusion and denial.
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Brexit is done, move on. This is about the EU.
Quoting Polimini
Brexit is done, move on. This is about the EU.
Really?
Perhaps word hasn't reached expats in Portugal that the UK has introduced a Bill that if passed will breach the NI Protocol and BJs HARD TCA, and being in breach of ratified International Trade treaties , will lead likely to a trade war between the UK and the EU. Its largest trade partner.
Done?
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Quoting RossEdwards
Aaah hell stop the delusion guys. BOTH BoE and OBR projected CLEARLY that The Hard Brexit TCA negotiated and much feted, by the JMG brigade.. would result in a SIGNIFICANT reduction in UK economies GDP growth potential. They both, have since made it clear that none of the other headwinds Ukraine.CV19, have in ANY WAY changed their assessment of that underlying drag on the UK economy going forward. No Bones this downturn is NOT ALL ABOUT BREXIT. Thats a misrepresentation of my point. Its about how the UK has had to step up to the challenges of CV19/Ukraine,...
Ross, please, it's not delusional to just state that comparing things from years ago with now is just irrelevant. It's a statistical imperative to compare like with like. And estimates are just that: estimates, based on nothing else than some parameters that existed then and not now. OBR are better than most are guesstimating but they estimate all the same and I'll bet that very, very few of their estimates are strictly correct and, bless them, that isn't always their fault because the parameters change. BoE thought Inflation would be over 13% in the UK now. It's still shocking at 11.1% but 2 % difference is not surprising to me as they were estimates based on assumptions made months ago. So, I treat any estimates projected further than a few days, to be honest, to be somewhat doubtful. The longer the time period, the more uncertainty in any validity of the figure.

To emphasise the point, we get movements in base assumptions with every tick of news on this site and globally and we can experience very regular moves of several cents in a day in currencies, so comparing the base assumptions from 5 years ago is just nonsense. I make these statements time and again.
My technical analysis trades do well on the basis of resets every time news changes the base assumptions, i.e at every major news announcement the foundation changes. Any previous technical base goes straight of the window, 30 minutes before a new item of significant news is planned. It's why I don't hold much interest in trading in periods longer than minute-candles. I don't look back but forwards only.
This is nothing to do with any assumed pro-Brexit or anti-Brexit political stance assumed. I am not in any way making political statements.
Quoting DaJoWaBa
Ok. Ugh, that old potato. .... so it really is disingenuous to seek to make it out to be all Brexit dependent or that if only Brexit hadn't happened everything would be fine and dandy because it wouldn't.
...
AT NO POINT did I suggest that it is ALL Brexit dependent. I do say that it is SUBSTANTIALLY related to the HARD TCA dictated by BJ and the ERG. My view is substanciated by Bank of England Michael Saunders now free to comment of Brexit , who confirm that in HHO, .. leaving EU has ‘permanently damaged’ economy.
“It’s reduced the economy’s potential output significantly, eroded business investment,” he said, adding: “If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week.”
But hey what does he know.

"It's not astrophysics. If you cut yourself off from your biggest market, ratchet up bureaucracy and put in trade barriers while having nothing whatsoever to replace it, you're going to be in trouble. ". (source Twitter)
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Quoting RossEdwards
{quote} AT NO POINT did I suggest that it is ALL Brexit dependent. I do say that it is SUBSTANTIALLY related to the HARD TCA dictated by BJ and the ERG. My view is substanciated by Bank of England Michael Saunders now free to comment of Brexit , who confirm that in HHO, .. leaving EU has ‘permanently damaged’ economy. “It’s reduced the economy’s potential output significantly, eroded business investment,” he said, adding: “If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week.” But hey what does he know.
LOL, bless Michael Saunders, I was aware of that pronouncement and I didn't know whether to laugh or cry for exactly the same reason I keep stating. Hemay be a fine economist as far as economists go, but he's as human as the next in terms of being able to predict the future or rewrite the past.

At no point have I suggested that Brexit doesn't have a part to play in the mix but we shall never know just how much and I will continue to refuse to believe any chalk-and-cheese comparisons. Any guesstimate from anyone, no matter how respected, or otherwise, is irrelevant immediately after its made. It may be the best attempt in that moment but that's all.

No estimates took on board what might happen or indeed certainly what DID happen. Any government would have been distracted by Covid directly, or indirectly by the global logistical nightmare following Covid, and then also the Ukraine-induced energy inflation. The government sank huge amounts of cash into the economy for Covid and likewise with regard to energy support, so any potential Brexit effect is just a sideshow in this moment and, I say, totally unquantifiable due to the nature of unintended or parameter-excluded consequences.
IF the government had been able after Brexit to align the country to maximising consequential benefits (that DOESN'T mean that I think Brexit was all benefit and no pain OR all loss and no gain) then it IS possible that the figures could have been quite different. It's also possible that with no-Brexit that the process of stagnation in the economy would have continued or got worse. We can't know and making comparisons is futile.

We are where we are and should focus energies ONLY on making the most of what lies in front and on the basis of what we have.

Trade deals with any country or group pf countries is obviously MEANT to be advantageous, no denying, but it's NOT always a certainty to be of equal benefit or that both parties get gains. Furthermore the balance of gain and pain changes over time the moment after the ink is dried on the treaty. There are always costs involved too. Large trade blocs necessitate rules of engagement (binding treaties, for instance, which means that the supplicants are behoven to the parameters of history and not what might happen tomorrow) and so it may hamper progress for any one individual part of the organisation either on a political spectrum, or economical spectrum, or both.

A fairly good analogy for succeeding in life in whatever sphere, is sport. Nearly all games and sports are based on a mix of skill, endurance, mentality, concentration, stamina, training and randomness or luck. Life is like that too and randomness is huge in what has happened in the last 5-8 years or even the last 2 decades (Arguably that's 'normal' through history).
On paper one team can be better than another and yet still lose the match. They may have won the league the previous year but if the better team just carries on in the same manner, thinking that they're entitled to win the next match and don't take a moment to realise that things have changed and assess what needs changing then they can become regular losers.

IF Brexit had not happened then I'd be urging the government to maximise what opportunities existed and reducing the negatives. But Brexit has happened and I urge the government to maximise the benefits that may exist and do everything possible in reducing the negatives. Focus all energies on it. As of yet there has NOT been a period of time where the energies have not be sapped putting out Covid and Global logistical disruption/Energy inflation wildfires OR even political scandals and own-goals.

The rate of change in a global economy has sped up and any organisation created in the past may no longer be fit for purpose. It may actually suit to be small and nimble, able to adapt quickly to the new parameters in the same way that start-ups and new competitors can steal a march on monopolies. I am not making any political statement about Brexit, just that I DON'T believe that one solution fits all and I can be open-minded about just getting on with dealing with new realities rather than getting all nostalgic about what was or what might have been.

I'm out of here now. Have a good weekend.
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#doyourownanalysisordietryin
long winded bs to avoid committing to anything
Quoting RossEdwards
Aaah hell stop the delusion guys.IMHO..folk in ideological delusion and denial.
Yea, but you're the one going on about their report as gospel, linking it up today when everyone else ignored it.
A total retail pantomime.
Don't you see any irony in that?
#doyourownanalysisordietryin
https://youtu.be/L09OvCiq_qY
Quoting Bones
{quote} Yea, but you're the one going on about their report as gospel, linking it up today when everyone else ignored it. A total retail pantomime. Don't you see any irony in that?
Well IGNORING IT IS what all the Brexiters want to do.. incase the penny drops with the voters that they were scammed. Now its the ELEPHANT in the room. Dont mention the B word.
@DWJB has the vapours when its raised (Oh that old potatoe?)

So Hands up to Total Irony... Everyone else ignored? But finally the Voters arent.
56% = Brexit Mistake / 32% Its cool??
A Retail panto?
Heres another Retail Laugh...
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Edit###BREAKING NEWS.. from "Daily Telegraph..
Chancellor Hunt pledges to remove "vast majority of trade barriers" with the EU to boost growth." And the govt may also change aspects of Johnson's Brexit Deal? (TCA)
But still NO to rejoining SM? Good Luck with that.
CHERRY PICKING DELUSION REVISITED.
Hancock in "Im a Celebrity.". now Hunt in "Fantasy Island" Revisited..
##They will be air-brusihng BJ out of photos next## Jacob wont be pleased.
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Austerity is the only solution for UK economy for the next 3-5 years. Bitter pill, but no other cure.
For Clarification.
Notwithstanding the media barrage above where the Tory press can be seen turning on their own.. I personally think Hunts Budget was rational and pragmatic. and put pragmatism (what best for country) over partisan political and ideological priorities. But austerity without growth would be a disaster. and IMHO only reentry into SM will guarantee that.

#My Posts on Brexit above are not Politically motivated. As a democrat I fully accept the validity of the 2016 referendum however dishonest the Leave lobbyists were. Brexit is done in that sense.
However as an economist/investor/trader on purely pragmatic level I believe that the CHOICE of a HARD BREXIT TCA, is doing immense damage to the countrys economy hobbling growth stifling industry and making ordinary people poorer. SERIOUS damage. Speak with business folk.
So FKUC the ideology trip, that needs changing. And theres no going back. Would be big resistance from lot of EU27 .. though some like Germany might welcome it, many others dont want UK back as Members.
Will it be better with a change in Government?.. I dont know. But as long a ERG is around in Tory party it not going to get done by this lot. But SOMEONE needs to grow up and renegotiate the deal re-enter the SM and reset the UK-EU relationship with some sort of EEC status.
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Quoting Bones
{quote} Yea, but you're the one going on about their report as gospel, linking it up today when everyone else ignored it. A total retail pantomime. Don't you see any irony in that?
Really? Your not reading The Times m'Boy.
"It’s a fair bet there is one word Jeremy Hunt will do his best to avoid mentioning when he sets out his “eye-watering” budget today. Yet it is the one word that cannot be ignored in any serious discussion of the deep hole in which the British economy finds itself, or how to get out of it.??

Denial is official policy..this from the Telegraph?:
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.
And we see it inaction live with trade Secretary Kemi Badenoch. asked whether, given the @OBR_UK 's forecast on the impact of Brexit, to grow the economy the government needs to negotiate closer ties with the EU.
She said the OBR’s forecasts were never “quite right”.

You got the script right @bones..
when out of ideas.. go for the player not the ball..
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Quoting RossEdwards
{quote} Well IGNORING IT IS what all the Brexiters want to do.. incase the penny drops with the voters that they were scammed. Now its the ELEPHANT in the room. Dont mention the B word. @DWJB has the vapours when its raised (Oh that old potatoe?) So Hands up to Total Irony... Everyone else ignored? But finally the Voters arent. 56% = Brexit Mistake / 32% Its cool?? A Retail panto? Heres another Retail Laugh... {image} Edit###BREAKING NEWS.. from "Daily Telegraph.. Chancellor Hunt pledges to remove "vast majority of trade barriers"...
I'm not denying that we're ALL looking at a massive recession.
I don't get my outlook from the media at all.
My post was about anyone involved in the markets who ignored that OBR report for a good reason.
The market ignored it because they were NEVER right (no price movement off report release)
GBP/USD just bounced off its all-time low, yet you're bearish into the end of the year cause you spending time reading fairytale outlooks that put the UK in more trouble than Italy.

Uk credit rating
Moody's Aa3 negative
Italy credit rating
Moody's Baa3 negative
Spain
Moody's Baa1moderately negative
#doyourownanalysisordietryin
I'm saying the chart is not agreeing, and those people are ALWAYS wrong.
Unless we join the closed shop, you're talking about a economic divergence from Europe. So then, how come the markets are not reflecting your biased political view?
I think Brexit has a fair 30Y to prove the EU is a flawed concept,
talk again then.
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