FOMC Leaves Policy Unchanged But Data Suggest Otherwise

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FOMC Leaves Policy Unchanged But Data Suggest Otherwise

 

Latest weekly balance sheet data from major Central Banks show aggregate liquidity growth sliding to 16%, less than half the rate recorded in early-April ( 3m ann. rate). The G4 equivalent (ex. China) has dropped to 17% versus its 41% peak. This week, the Federal Open Market Committee (FOMC) left policy on hold, yet US monetary base growth has plummeted to 7%: it peaked at 78% only 10 weeks ago. It is driving the downturn in policy liquidity expansion. ECB and Bank of England liquidity growth also peaked in April but the downturn has been less pronounced. Meanwhile, the People’s Bank of China, and now the Bank of Japan too, look to be moving in the opposite direction.

 

 

 

See our latest published research, Weekly Global Liquidity Update 18 June  2021

 

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