{"id":54511,"date":"2014-07-20T22:49:44","date_gmt":"2014-07-21T02:49:44","guid":{"rendered":"http:\/\/countingpips.com\/?p=54511"},"modified":"2014-07-21T07:11:50","modified_gmt":"2014-07-21T11:11:50","slug":"monetary-policy-week-in-review-jul-14-18-2014-fed-debate-intensifies-3-central-banks-raise-rates-2-cut","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/07\/monetary-policy-week-in-review-jul-14-18-2014-fed-debate-intensifies-3-central-banks-raise-rates-2-cut\/","title":{"rendered":"Monetary Policy Week in Review \u2013 Jul 14-18, 2014: Fed debate intensifies, 3 central banks raise rates, 2 cut"},"content":{"rendered":"
July 20, 2014<\/div>
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By CentralBankNews.info<\/u><\/a>
\n    Last week in global monetary policy, three central banks raised policy rates (South Africa, Egypt and Ukraine) while two banks (Turkey and Chile) cut their rates as the debate over the U.S. Federal Reserve\u2019s eventual interest rate rise intensified.
    There were three developments surrounding Fed policy that stood last week.
    First, the Fed\u2019s statement in its latest Monetary Policy Report that the share prices of social media and biotech firms appeared  \u201csubstantially stretched.\u201d
    Second, a series of news stories with major investors and Wall Street financiers calling for the Fed to start to normalize monetary policy and think about rate rises.
    Third, Fed Chair Janet Yellen\u2019s testimony to a Senate committee that included the statement that rates could be raised sooner if the labour market improves more quickly than anticipated.
    While Yellen\u2019s reflections on the labor markets and investors\u2019 views of  Fed policy are part of the normal evolution of a policy consensus in a democratic society, the Fed\u2019s mention of the share prices of two specific stock sectors was a surprise.
    Economists and central bankers have for years debated how monetary policy should react to booms in asset prices and the risk of financial instability, a debate that most recently hit the headlines following the annual report by the Bank for International Settlements (BIS).
    The Fed\u2019s statement about the stock prices of social media and biotech firms is thus an example of how central banks initially will react when they perceive that certain assets are inflated.<\/p>\n

LIST OF LAST WEEK\u2019S CENTRAL BANK DECISIONS<\/span><\/b>:<\/b><\/span><\/div>\n
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