Discourse: Navigating the New World Order: Central Bank Insights
Got curious about the global impact of U.S. policy uncertainty, particularly on monetary policy? Wanna hear expert insights on this hot topic?
Look no further! On Wednesday, May 7 at 10am ET/3pm BST, Chris Giles, author of the Central Banks newsletter, will join FT's Monetary Policy Radar reporters Elettra Ardissino, Joel Suss, and Andrew Whiffin for a live Q&A session.
Got a burning question about policy uncertainty and Stagflation, or want to know how central banks tackle global challenges? Leave it in the comments below this story, or endorse questions you'd like them to tackle most. The experts will respond to readers' questions in the comment field during the live Q&A.
To keep the date handy, add it to your calendar right here!
By the way, here are some expert views on the situation:
- Policy Uncertainty and Stagflation: Rising uncertainty, especially in the U.S., can amplify economic instability and make it tough for central banks to manage monetary policy. This cobweb of uncertainty can stir up concerns about stagflation—a combo of economic stagnation and inflation. For example, high U.S. recession likelihood and potential tariff hikes could send inflation surging in the U.S., contradicting EU and China's trends.[5] Stagflation fears are intensified by the asymmetric impact of U.S. tariffs, acting like a shock to both growth and inflation.[5]
- Global Monetary Policy Challenges: In this ambiguous economic landscape, central banks struggle to maintain a balance between growth objectives and inflation control, especially as global growth is projected to slow down. Rising uncertainty fuels financial turbulence, characterized by high bond yields and increased compensation for holding long-term debt. This escalates financing costs and makes prospects tough for developing economies.[2]
- Threats to Central Bank Independence: While the data doesn't directly refer to the threat to central bank independence from U.S. policy uncertainty, generally, economic policy uncertainty can influence the political environment in which central banks operate. In times of uncertainty and challenges, political pressures on central banks can mount, potentially threatening their independence.[6]
During the live Q&A on May 7 at 10am ET/3pm BST, one of the topics to be discussed will be the impact of policy uncertainty on global trade, specifically highlighting challenges central banks face in managing monetary policy and avoiding stagflation. Additionally, it's worth noting that the uncertainty might also pose threats to the independence of central banks as political pressures may grow during difficult economic periods.
