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For central banks, no easy solution

First published: Nikkei Asian Review, 22/09/2016

After the Bank of Japan and U.S. Federal Reserve meetings this week,  it is clear their positions could not be more different. While the BOJ is struggling to ease monetary policy, the Fed is struggling to tighten, or more accurately, to reduce monetary accommodation. In both cases, though, what we can read between the lines is a growing concern about the ineffectiveness of monetary policy alone in addressing complex economic circumstances.

The Fed’s decision to leave interest rates unchanged again is, in many ways, more straightforward than the BOJ’s announcement. The split vote at the Fed, at 7-3 for no change, reveals an interesting picture of division between the rotating Fed presidents and fixed-term governors on the Federal Open Market Committee. Fed chair Janet Yellen may have to work harder to overcome such division for a stronger consensus in the future….Read more: