(FS.1.02) Central Banking Your browser does not support the audio element. [New] The Federal Reserve is committed to unlimited purchases of U.S. securities and Fed Chair Jerome Powell has warned of deep and lasting economic consequences without more fiscal support. [New] The G4 economies plus China will have increased their balance sheets by $13 trillion by end-2021, with the Federal Reserve and European Central Bank balance sheets topping 50% of GDP. [New] The Bank of Mexico had room to cut the monetary policy rate and predicted a rate of 4.25% by the end of the year. [New] Citi analysts expect the Bank of England (BoE) to cut rates by 25 bps in 2020 followed by more easing in the form of the bank rate falling to the effective lower bound and a £50bn QE program in early 2021. [New] This year, the Bank for International Settlements - the central bank for central banks-said that climate change could trigger potentially extremely financially disruptive events that could be behind the next systemic financial crisis. [New] Under our baseline as the economy recovers in 2021 and the European Central Bank keeps interest rate low the debt dynamics become much more favorable and the public debt to GDP ratio is projected to come down to about 150% of GDP. [New] The Federal Reserve will temporarily stop all examination activity for banks with less than $100 billion of assets as it shifts supervisory priorities due to the coronavirus pandemic. The Bank of England is projecting a 14% dive in GDP and a doubling in unemployment, much, but not all of it, reversed next year. The Bank of England predicted a 30% fall in UK GDP during the second quarter, a 14% drop for 2020, and the deepest recession since 1706. The Bank of England (BoE) has warned Britain could be headed for its biggest economic slump in more than 300 years because of the coronavirus lockdown. The Bank of England has noted that the risk posed by handling a polymer note is no greater than touching any other common surfaces such as handrails, doorknobs or credit cards to catch a virus.. Stocks are expected to outperform bonds handily in 2020 as the global economy bottoms out in the first quarter, while monetary policy remains accommodative. Economists foresee further cuts in Thailand's policy interest rate next year - but not next month - after the central bank governor said policy makers are prepared to act if economic growth worsens, though will avoid taking interest rates below zero. The Bank of England has estimated that investments worth more than $20 trillion could be left stranded as governments set more ambitious climate targets. The interest rate on US 3-month Treasury bills is expected to remain near 0.1%, whereas the interest rate on 10-year Treasury notes is expected to rise gradually from its current level of 0.6%, averaging 0.7% in 2021. The Federal Reserve expects US firms to be able to continue operating and lending to households and businesses, even during times of economic and financial market stress. China's central bank has taken relatively modest actions, reducing reserve requirements for banks, which will allow them to loan an additional $80 billion to struggling businesses, and indicating that it will cut interest rates in the months ahead. The central bank is confident that Indonesia's economic prospects in 2020 will remain adequate and are likely to improve due to well-maintained national economic stability and the continuation of economic growth momentum. CBILS is an initiative where - in the government will provide lenders with a guarantee of 80% on loans to businesses with a turnover of up to £45m; a separate initiative has also been made available by the Bank of England for larger corporates. Interest rate cuts and quantitative easing announced by the South African Reserve Bank will provide some support to consumer spending and encourage lending and investment. The Bank of England has revived Quantitative Easing (QE) by announcing it will buy a further £200 billion of government and corporate bonds, taking the total up to £645 billion. The Bank of England expects GDP growth of 0.2% quarter-on-quarter in the first quarter of 2020. The European Central Bank has introduced an extraordinary bond-buying programme of private and public securities totaling 750 billion euro (of which 220 billion in Italian bonds, equivalent to 12% of national GDP) to stabilize financial markets and mitigate risks of growing interest rates. See full forecast Last updated: 28 May 2020 Hi, Would you like a quick online demo of our service from an experienced member of our team? Yes No
