The hottest Central Banking Substack posts right now

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Top Links 559 Will there be dollar-renminbi dramas in garbage time? Central bank independence in SE Asia & Sartre, Anderson, Jameson.

Chartbook • 371 implied HN points • 13 Nov 24
💰 Finance Central Banking
  1. There could be important developments regarding the dollar and renminbi exchange rates in the near future. This might affect global economics significantly.
  2. The independence of central banks in Southeast Asia is a key topic worth watching. Their decisions can impact regional economies and policies.
  3. The work and ideas of philosophers like Sartre, Anderson, and Jameson are still relevant today. They offer interesting perspectives that connect to current issues.

Money Market Update

Concoda • 324 implied HN points • 27 Nov 24
💰 Finance Central Banking
  1. The Federal Reserve plans to keep reducing its balance sheet until at least 2025. This is to normalize financial conditions rather than to tighten the economy.
  2. Recent changes in interest rates show that the Fed is trying to clear extra cash from its programs. This could help push down short-term borrowing rates and shake up financial markets.
  3. Despite a strong U.S. dollar, there's still good liquidity available in the markets. This offers potential support for riskier investments as banks might adjust their capital due to rising stock prices.

The Fed & the Central Banking Order of Operations

Without Warning • 196 implied HN points • 10 Mar 23
💰 Finance Central Banking
  1. Central banks follow a specific order of operations during financial crises, involving rate cuts, quantitative easing, and emergency liquidity facilities.
  2. Dallas Fed President raised the idea of separating asset runoff from rate adjustments, suggesting that the balance sheet and rate policy can be independent during market instability.
  3. Fed officials are discussing the possibility of actively growing the balance sheet during monetary tightening, signaling a potential shift from the traditional central banking order of operations.

Central Bankers Disagree About Gold

QTR’s Fringe Finance • 27 implied HN points • 22 Nov 25
💰 Finance Central Banking
  1. Gold prices have significantly risen, which some believe signals trouble for the US dollar and the overall financial system. This raises questions about the stability of fiat currencies.
  2. Central bankers have differing views on gold's relevance; while one downplays gold's importance, another sees its rising value as a sign of eroding trust in the dollar. This shows a divide in how they understand economic stability.
  3. Gold remains a crucial asset for central banks, sometimes even more so than government securities, indicating that it is still valued as a safe haven in uncertain times.

The Fed's Global Dilemma

Concoda • 794 implied HN points • 01 May 23
💰 Finance Central Banking
  1. The banking system has evolved significantly post the 2007/08 Great Financial Crisis, leading to changes in global monetary standards and U.S. central bank's mechanisms.
  2. Regulatory standards like LCR, NSFR, and SLR have transformed major financial institutions into stable entities, impacting their ability to engage in certain financial activities.
  3. The Federal Reserve introduced new mechanisms like Jaws of the Fed™ to control money market rates and ensure financial stability, but faces a dilemma with vulnerabilities in its global lower jaws.
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The Fed Doesn’t Determine the Price of Credit; Markets Do

QTR’s Fringe Finance • 16 implied HN points • 25 Nov 25
💰 Finance Central Banking
  1. The Federal Reserve doesn't control credit prices; they are determined by the market's supply and demand. This means that even if the Fed sets interest rates, actual market rates can be higher or lower based on financial conditions.
  2. Recent events in the repo market show that when the government's borrowing increases, it can lead to tighter liquidity in banks, affecting interest rates. This reveals the limits of the Fed's ability to manage short-term capital markets.
  3. To create a strong monetary system, it's important for central banks to recognize their limits and focus on stabilizing money value. Interest rates should be left to the market, not manipulated by policymakers.

The Treasury's Gambit

Concoda • 653 implied HN points • 27 May 23
💰 Finance Central Banking
  1. Monetary leaders are implementing new tools to prevent instability in the bond market and stimulate risk assets without central bank assistance.
  2. Regulatory constraints have hindered major liquidity providers in the Treasury market, leading to the need for Treasury buyback programs to enhance liquidity.
  3. The U.S. Treasury is set to conduct buyback programs in 2024 to manage cash, boost liquidity, and potentially lower expenses and yields in the secondary Treasury market.

When cash is still king

Klement on Investing • 3 implied HN points • 03 Dec 25
💰 Finance Central Banking
  1. Everyday cash use is falling, but the total value of banknotes in circulation has risen sharply, largely because people hold more large-denomination notes.
  2. Low or negative interest rates lower the opportunity cost of holding cash, so people hoard big bills as a store of value and the velocity of those notes falls when rates are low and rises when rates increase.
  3. Large banknotes make it easier to pay off the books or hide gifts, so the growth in big bills likely reflects tax evasion and a larger shadow economy, which reduces government tax revenue.

Why Price Stability Is A Dangerous Illusion

QTR’s Fringe Finance • 14 implied HN points • 15 Jul 25
💰 Finance Central Banking
  1. Many economists believe that keeping prices stable is really important for a healthy economy. They think it helps businesses understand consumer needs better and allocate resources effectively.
  2. However, the idea that money is neutral and only affects price levels can be misleading. When money supply changes, it can cause unfair advantages for some people over others, which leads to wealth redistribution.
  3. Overall, the belief in price stability might hide the real impacts of inflation. Just because prices seem stable doesn’t mean that the economy is healthy; it may actually create problems down the line.

The Death of QT

The Last Bear Standing • 179 implied HN points • 17 Mar 23
💰 Finance Central Banking
  1. The Federal Reserve struggled with liquidity tightening, leading to emergency measures and a new financial crisis.
  2. Understanding the monetary plumbing system is crucial to comprehending the impact of Quantitative Tightening (QT) on the banking sector.
  3. Quantitative Tightening (QT) may not continue for long, as challenges in the banking sector could be exacerbated without further accommodations from the Federal Reserve.

Trump v Powell: The Credibility Cost of Politicized Monetary Policy

QTR’s Fringe Finance • 12 implied HN points • 03 Jul 25
💰 Finance Central Banking
  1. Trump wants lower interest rates, but if the Fed lowers them while inflation is still high, it could lead to bigger problems like stagflation. This may feel good short-term but is risky long-term.
  2. Political pressure on the Fed can hurt its independence and credibility. If the public thinks the Fed is making decisions based on politics, it could lead to higher inflation expectations.
  3. Comparing US interest rates with other countries without considering their unique situations is misleading. Monetary policy should be based on domestic economic conditions, not just foreign examples.

The Everything Bubble Suddenly Feels Unstable

QTR’s Fringe Finance • 29 implied HN points • 15 Jan 25
💰 Finance Central Banking
  1. Investors might need to prepare for tougher conditions in the market. It seems like the Federal Reserve might not be there to support them like before.
  2. The era of easily accessible money may be changing. Investors who relied on quick fixes might find it harder to bounce back from crises.
  3. It's important for investors to rethink their strategies. They may need to adapt to a new reality where traditional safety nets aren't guaranteed.

What is Yi Gang trying to say in his 1st interview after retiring from PBoC?

Pekingnology • 71 implied HN points • 06 Feb 24
🌍 World Politics Central Banking
  1. Yi Gang discussed the historical significance of Jiaozi, the first paper money, and its implications for currency policies
  2. He emphasized the importance of competition under constraints for a successful monetary system
  3. Yi Gang highlighted the necessity of establishing and enhancing modern central bank systems to maintain currency stability

How New Zealand invented inflation targeting

The Works in Progress Newsletter • 9 implied HN points • 23 Jun 25
💰 Finance Central Banking
  1. New Zealand was the first country to adopt inflation targeting as a main goal for its central bank. This goal helped to stabilize prices and became a standard practice worldwide.
  2. The change in monetary policy came from political decisions rather than academic consensus. Roger Douglas, the Finance Minister in the 1980s, publicly set clear inflation goals, leading to a new approach in controlling inflation.
  3. Inflation targeting not only worked well in New Zealand but also influenced many other countries to adopt similar strategies. It helped central banks stabilize inflation expectations and aligned their incentives to minimize political interference in economic decisions.

The Costco Gold Indicator

QTR’s Fringe Finance • 74 implied HN points • 29 Sep 23
💰 Finance Central Banking
  1. The average American's trust in fiscal and monetary policy can be seen through buying gold at Costco.
  2. Public awareness of how central banking works is increasing.
  3. Criticisms and questions about central banking policies are becoming more common and publicly discussed.

Venstappen Victory Lap

Malt Liquidity • 8 implied HN points • 14 Mar 24
💰 Finance Central Banking
  1. Food delivery companies like Doordash may struggle to sustain growth post-lockdowns, facing challenges with profitability and expanding their customer base.
  2. Central bank policies face challenges in balancing inflation control and market stability, leading to potential risks of speculative bubbles and volatility.
  3. Inflation can impact investment decisions, prompting individuals to seek ways to outpace the rate of return to counter its effects.

The Truth Behind the Federal Reserve

Harnessing the Power of Nutrients • 0 implied HN points • 10 Dec 08
🇺🇸 U.S. Politics Central Banking
  1. The Federal Reserve, which controls the nation's money supply, is privately owned and has been a key player in driving countries into massive debt through various methods.
  2. The history of banking and central banking in America involves a complex web of power, from fraudulent practices to political manipulation, impacting the country's economic landscape significantly.
  3. Proposed solutions such as reclaiming the government's power to print debt-free money, alongside advocating for a monetary reform act, aim to combat the control of elite corporations and bankers and restore financial independence to the country.

Macro Thinker: Lawrence Summers on Trump and The Fed

The Octavian Report • 0 implied HN points • 23 Dec 25
💰 Finance Central Banking
  1. The Fed is tightening too much too quickly; policymakers should allow a mild overshoot of the 2% inflation target and seriously consider new frameworks like a higher inflation target or nominal GDP targeting.
  2. The biggest macro risk is a coming recession when monetary policy may have little room to cut rates and fiscal authorities might be unwilling to act, so governments and central banks should prepare now.
  3. Crises often require government-led spending and borrowing to restore confidence, and at the same time waning trust in experts and growing speech intolerance on campuses threaten open debate and sound policymaking.