The regular BIS meetings are the place for informal information sharing (having participated in them in 2015-2016 I can say it works quite well). Plus central banks do have global inputs in their models. I think the real problem is the perception by the Fed that the US is essentially a closed economy (the 2015 pivot was an exception). Al…
The regular BIS meetings are the place for informal information sharing (having participated in them in 2015-2016 I can say it works quite well). Plus central banks do have global inputs in their models. I think the real problem is the perception by the Fed that the US is essentially a closed economy (the 2015 pivot was an exception). Also the Fed clearly sees the nexus of inflation in a too tight labor market, and they will need to see that move before they ease back (no signs of that yet). There is also a view (see Goldman research for example) that any recession will be mild given strength of private sector balance sheets. So despite the soft-landing rhetoric, my read is the leadership at the Fed has already accepted the necessity of a recession, betting it will be mild and short.
The regular BIS meetings are the place for informal information sharing (having participated in them in 2015-2016 I can say it works quite well). Plus central banks do have global inputs in their models. I think the real problem is the perception by the Fed that the US is essentially a closed economy (the 2015 pivot was an exception). Also the Fed clearly sees the nexus of inflation in a too tight labor market, and they will need to see that move before they ease back (no signs of that yet). There is also a view (see Goldman research for example) that any recession will be mild given strength of private sector balance sheets. So despite the soft-landing rhetoric, my read is the leadership at the Fed has already accepted the necessity of a recession, betting it will be mild and short.