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Talk about being disappointed…By the Bundesbank

Take a look at this list of Bloomberg headlines coming out today:

*BUNDESBANK: INFLATION EXPECTATIONS NOTICEABLY BELOW ECB MANDATE

Wauw will the Bundesbank advocate monetary easing?

*BUNDESBANK DOESN’T SEE TURN IN GERMAN ECONOMIC FUNDAMENTALS

Yeah it sure looks like that!

*BUNDESBANK SAYS RUSSIA SANCTIONS LIKELY TO DAMP GERMAN EXPORTS

Yes, yes the Bundesbank is surely dovish

*BUNDESBANK SAYS GERMAN ECONOMIC OUTLOOK HAS CLOUDED

This gotta mean the Bundesbank will support QE

*BUNDESBANK SAYS DATA CAST DOUBT ON GERMAN 2H ECONOMIC REBOUND

Increadibly dovish Bundesbank…

*BUNDESBANK SAYS ECB PACKAGE ACCEPTABLE GIVEN LOW INFLATION

Yes, yes… have the market monetarists taken over in Frankfurt?

*BUNDESBANK SAYS EURO-AREA REBOUND TO BE WEAKER THAN EXPECTED

Yeah! Now the Bundesbank surely will endorse QE! No doubt!

*BUNDESBANK SAYS EXPANSIONARY POLICY MAY HARM REFORM EFFORTS

Or maybe not! Talk about being disappointed…

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3 Comments

  1. Could it be the central banks are reluctant to be more expansionary because they are worried about perceived risks of unconventional policies? I’m not saying worrying about these risks are warranted.

    Reply
    • Danny, that certainly might be the case. However, I would also say that this preoccupation with other concerns that hitting it target means that many central banks today badly fail to do their job of securing nominal stability.

      Reply
      • Do you believe there is risks from unconventional policies and that these risks can outweigh the risk of missing nominal stability?

        Maybe the problem is asset purchasing as a means of monetary policy. The effectiveness of asset purchasing might be limited because the assets the fed purchases (treasuries for example) are claims on the MB so are therefore long term impermanent without constant new asset purchases. Just placing money into circulation through heli’s might solve the long term permanence issue because the fed wont have claims on MB.

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