Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
How Central Banks Use Moral Suasion to Guide Markets
Episode 51 of Monetary Policy Explained with Fexingo dives into moral suasion—the soft power central banks use to influence markets without changing rates or reserves. Lucas and Luna unpack how the Bank of Japan's 2022 yield defense relied on jawboning, why the Federal Reserve's 2023 whispers about bank capital ratios moved credit desks, and where this tool works best (and fails hardest). Specific examples include the BOJ's verbal interventions to defend the 0.25% yield cap and the ECB's 2022 guidance on rate hikes that front-ran actual policy moves. The hosts also explore…
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