Posts Tagged ‘Monetary Policy’


The Problem with Too Much Debt Explained in One Minute

Whenever the countries are overly indebted, then more debt is added to tackle the problem. It works in the short-term. But in the long-term, the total debt has severe consequences. To service the debt, the central banks like the Fed lower the interest rates. The additional debt leads to less GDP growth. The central bank intervenes when the country is in debt and uses the monetary policy as a tool to solve it. However, meaningfully reducing debt in a large […]

Bank of England Monetary Policy | Bank of England Inflation Report

In this video, you will learn about the Bank of England, and its functions. The Bank of England served as a blueprint for other central banks. It was originally founded in 1964 to fund war efforts initially, and then switched services to serve the public. It was nationalized in 1946. In 1997, the bank obtained its right to set its own monetary policy directly. Many other central banks followed closely the functions of the Bank of England. […]

European Central Bank Monetary Policy

In this video, you will learn about the ECB and how it controls the overall European economy using monetary policy as a tool. It is the central banks for 19 countries in the eurozone. The euro is the common currency. The ECB maintains price stability and also protects the purchasing power of the euro. The Governing Council is responsible for controlling the monetary policy. Mario Draghi is the current ECB President. The ECB aims to maintain the annual CPI […]

How Monetary Policy Impacts on Forex Market

Announcements of monetary policy are released by the central banks. They are also released by governments. You can know about their release by looking at the economic calendar. An important one is the interest rate announcement. You can also come across press conference to happen by central banks like the ECB. Monetary policy announcements also inform about quantitative easing by the Fed. For example, if the Federal Reserve sounds dovish in its […]

What Is Fiscal Policy & Monetary Policy? And How They Impact on a Currency?

In this video, you will learn about the impact of fiscal and monetary policy on the strength of a currency. Monetary policy is a tool that the central bank uses to control the amount of money flowing into the economy. When too much money flows into the economy, then it causes inflation. However, if too little money flows into the economy, then it reduces the growth of the economy. So, time to time, the central bank […]

The Fed Explains Monetary Policy

Economies constantly fluctuate. It needs a careful strategy to keep it running smoothly. Hence a tool is needed, called monetary policy. A monetary policy influences interest rates to control the economy. To maintain price stability and high employment, a good monetary policy is needed. The Federal Reserve protects the economy by using a good monetary policy as a tool. The Congress founded the Federal Reserve in the year 1913. Economic events like recession, slow […]

What Is Hawk Monetary Policy?

When you hear finance people talking about doves and hawks, they usually are not referring to birds. Most often they are describing the attitude of Federal Reserve policymakers towards inflation. The hawks worry more about inflation, the doves about jobs. A policy maker or advisor who is predominantly concerned with interest rates as they relate to fiscsl policy. A hawk generally favors relatively high interest rates […]

What Is Monetary Policy?

Monetary policy is one of the ways that a government attempts to control the economy. If the money supply grows too fast, the rate of inflation will increase. If the growth of the money supply is slowed too much, then economic growth may also slow. The actions of a central bank, currency board or other regulatory committee that determines the size and rate of growth of the money supply, which in turn affects interest rates. Monetary […]

Monetary Policy Explained

Monetary Policy is the action of Central bank currency board or other regulatory committee that determines the size and rate of growth of money supply which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate or changing the amount of money banks need to keep in the vault. In the United States the Federal Reserve is in charge of Monetary policy which is one of the way the US Government attempts […]

Diverging Interest Rates Drive Forex Volatility

Forex traders were betting heavily on a higher dollar due to the US Federal Reserve raising Interest rates. When the most recent Fed Meeting ended with a promise of a slow rate increase or none for now many Forex traders were caught in losing positions. The diverging interest rate policies of the US Federal Reserve and most other central banks is driving higher Forex volatility than seen in years. Volatility in currency […]