Jim’s Mailbox

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CIGA Tom with one of Yra Harris’s gems!


Notes From Underground: Did Xi Just Provide a Clue to China’s Yellow Brick Road?
April 28, 2019

In the past week, we have heard from the Bank of Canada and Bank of Japan. There were no surprises as both institutions noted softness in the global economy. The BOC, as reported by Bloomberg, “fully abandoned its bias toward raising interest rates at the economy grapples with a slowdown.” The BOC overnight rate remains at 1.75 percent, which is deemed appropriate by the Governing Council until the global economy removes some of the uncertainties it is struggling to overcome.

The BOJ statement continued to maintain that it is paramount for Japan to raise its inflation numbers because a failure to do so means this current period of “extremely low levels of short-and long -term interest rates” will continue “for an extended period of time, at least through around spring 2020.” This is aggressive forward guidance, and as the BOJ maintains, is representative of POWERFUL MONETARY EASING.

In an effort to justify its aggressive policy the BOJ said, “The Bank, decided to make clearer its stance to persistently continue with powerful monetary easing while examining uncertainties regarding economic activity and prices including the effects of the scheduled consumption tax hike and developments in overseas economies.”