Fiscal vs Monetary Policy

Monday, September 16th, 2019

Despite all the volatility and news of this year, and all those tweets and US-China trade tensions, the S&P500 is back to within 1 per cent of its recent record high and the ASX All Ordinaries is within 2 per cent of its all-time high. We are witnessing the thirteenth round of US-China trade negotiations with the hope of a conceptual agreement to be met. Yields have reverted higher over the past weeks, gold has fallen back, the Chinese stimulus is filtering through now and the European Central Bank announces additional stimulus. Can further monetary policy, conventional or unconventional, continue to stimulate growth in economies? And at what point does the effect become harmful?

One Response to “Fiscal vs Monetary Policy”

  1. Regardless of all other economic and financial arguments and speculation, especially interest rates, one of the outstanding policies/strategies to enable the Australian economy (and productivity) to start motoring, is to ensure Australian households and industry are paying as little as possible for energy (read electricity). That the current federal government has not had the wherewithal and rhetoric to recognize and deal with this is a real concern. (Witness Friday’s farcical (and dangerous) “Climate strike)”.

    This may be a simplistic comment/analysis, but it’s more factual than much of the current financial analysis/discussion.

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