Are Central Bankers Eyeing a Vaccine-Driven V-Shaped Recovery?

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Are Central Bankers Eyeing a Vaccine-Driven V-Shaped Recovery?

 

Weekly balance sheet data from the World’s major Central Banks show aggregate liquidity growth edging lower (latest 18.2% 3m ann.). The slowdown is most noticeable in the Fed data, and more gradual in the Bank of Japan and Bank of England numbers.

The exception is the ECB, where liquidity growth has picked up since New Year. Latest economic data show major economies broadly stable, except in the case of the Eurozone where sentiment indicators point to further weakness.

Recent policy statements make clear that Central Bankers are erring on the side of caution.  Yet, monetary policy is on hold and policy liquidity growth, whilst still relatively strong, is past its peak.

 

 

 

See our latest published research, Weekly Global Liquidity Update 5 February 2021

 

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