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Tenreyro: possible that more stimulus needed, to do so at an appropriate pace
— Joel (@JFrank_Crypto) January 11, 2021
BANK OF ENGLAND MPC MEMBER TENREYRO SAYS
- POSSIBLE THAT MORE STIMULUS BE NEEDED TO DO SO AT AN APPROPRIATE PACE
- BOE WORK ON FEASIBILITY OF NEGATIVE RATES STILL IN PROGRESS, I HAVE NOTHING NEW TO ADD TO THIS
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- TENREYRO SAYS ALL ELSE EQUAL, LOOSER MONETARY POLICY CAN HELP THE ECONOMY RECOVER FASTER, BRINGING INFLATION BACK TO TARGET
— Joel (@JFrank_Crypto) January 11, 2021
- FIRST, THE ‘FINANCIAL-MARKET CHANNELS’ OF MONETARY POLICY TRANSMISSION HAVE WORKED EFFECTIVELY UNDER NEGATIVE RATES IN OTHER COUNTRIES
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- EXPERIENCES OF NEGATIVE RATES IN OTHER COUNTRIES SUGGESTS THAT ‘BANK-LENDING CHANNELS’ OF MONETARY POLICY TRANSMISSION HAVE ALSO BEEN EFFECTIVE AT BOOSTING LENDING AND ACTIVITY
— Joel (@JFrank_Crypto) January 11, 2021
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- WE HAVE A VERY LARGE DEGREE OF SPARE CAPACITY, THERE IS NO SHORT TERM TRADE-OFF BETWEEN OUR OBJECTIVES
— Joel (@JFrank_Crypto) January 11, 2021
- LITTLE EVIDENCE TO SUGGEST THAT MANY ASPECTS OF POLICY WOULD OPERATE DIFFERENTLY FROM USUAL
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Tenreyro: Let’s talk about negative rates
Good afternoon and thanks for having me. It is a pleasure to give this speech, virtually, at UWE Bristol. Over the past year, the MPC used a range of policy tools to contribute to supporting the economy and bringing inflation back to target. We also discussed various other tools that might be needed at some point in future. We always keep our toolkit under review, and given the events of 2020, I am sure it is not surprising that those discussions continued over the year. The MPC set out its collective view on one of those tools, negative interest rates, in a box in its August 2020 Monetary Policy Report. Following ... (full story)
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