More central bankers wanting to ease off the pedal
Friday 28th May 2021Three central bankers argued for a more rapid tightening of monetary policy overnight. The Bank of England\u2019s Gertjan Vlieghe argued a scenario where rates in the UK could rise as early as Q2 next year, although NAB\u2019s David de Garis says markets might have overreacted to what was a far more nuanced argument. The pound is the big winner in the major currencies overnight. The ECB\u2019s Jens Weidman expressed concerns about monetary policy being pushed too far to tackle income distribution, whilst the Fed\u2019s Robert Kaplan wrote an article outlining how the US labour market might be tighter than many have thought, with people stepping out of the workforce for early retirement, for example. Tonight, the Biden administration releases its budget papers, with forecasts, and the long awaiting PCE deflator \u2013 although with so much uncertainty around the transitory nature of inflation, or otherwise, there\u2019s a question mark on just how valuable this read will be.
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