Tight US job market may persist due to demographics

2021 ◽  
Keyword(s):  
Monetary Policy ◽  
Baby Boomers ◽  
Inflation Rate ◽  
White Men ◽  
Retirement Age ◽  
Job Market ◽  
Content Type ◽  
Diversity And Inclusion ◽  
Generation Z ◽  
The Us

Significance Shortages vary by sector and geography. The US workforce will shrink as baby boomers (born between 1946 and 1964) retire and are replaced by the smaller cohort of Generation Z (born between 1997 and 2012). Pre-pandemic, many boomers worked past retirement age, slowing the workforce decline, but the pandemic broke that trend. Impacts The US labour market holds the key to the inflation outlook and thus the timing of the Fed’s tightening of monetary policy. Unemployment is set to drop below the so-called ‘natural’ unemployment level, the non-accelerating inflation rate of unemployment (NAIRU). Diversity and inclusion policies will accelerate the workforce exit of baby boomers as that generation has the largest share of white men.

scholarly journals Asymmetric Impacts of Inflation on the US Bond Rates and FED’s Pre-Emptive Policy

2020 ◽  
Vol 5 (2) ◽  
pp. 143-157
Author(s):  
İsmet Göçer ◽  
Serdar Ongan
Keyword(s):  
Monetary Policy ◽  
Inflation Rate ◽  
Lower Cost ◽  
Fisher Equation ◽  
Ardl Model ◽  
Nonlinear Ardl ◽  
Inflation Rates ◽  
Nonlinear Ardl Model ◽  
The Us ◽  
Asymmetric Impact

Abstract This study investigates the asymmetric impacts of changes in inflation rates on the US bond rates. This investigation is constructed on the Fisher Equation. To this end, the nonlinear ARDL model is applied. Empirical findings indicate that only the decreases (π− t ) in inflation rates affect bond rates. This asymmetric impact therefore shapes the FED’s monetary policy in terms of determining the bond rates at lower cost. When the inflation rate rises, the FED will know (in advance) that they do not need to increase the bond rates. This reminds us the FED’s former pre-emptive strike policy against inflation.

Optimal fiscal and monetary policy under different fiscal instruments

2020 ◽  
Vol 48 (1) ◽  
pp. 167-190
Author(s):  
Mehrab Kiarsi
Keyword(s):  
Monetary Policy ◽  
Inflation Rate ◽  
Dynamic Properties ◽  
Sticky Prices ◽  
New Keynesian ◽  
Content Type ◽  
Friedman Rule ◽  
Keynesian Model ◽  
Fiscal And Monetary Policy ◽  
Cash In Advance

PurposeThe paper includes characterizing Ramsey policy in a cash-in-advance monetary model, under flexible and sticky prices, and with different fiscal instruments.Design/methodology/approachThe paper analytically and numerically characterizes the dynamic properties of Ramsey allocations. The author computes dynamics by solving second-order approximations to the Ramsey planner’s policy functions around a non-stochastic Ramsey steady state.FindingsThe Friedman rule is not mainly optimal in a cash-in-advance model with distorting taxes. The Ramsey-optimal policy with both taxes on income and consumption calls for a high inflation rate that is extremely volatile, despite the fact that changing prices is costly.Practical implicationsThe optimality of zero nominal interest rate under flexible prices in monetary models is not mainly the case and quite depends on the preferences. The optimality of a zero inflation rate under sticky prices also very much depends on the assumed set of fiscal instruments.Originality/valueThe non-optimality of the Friedman rule under flexible prices is quite new. Moreover, studying the optimal fiscal and monetary policy in a New Keynesian model with a rich set of fiscal instruments is also quite original.

scholarly journals Fed and ECB: which is informative in determining the DCC between bitcoin and energy commodities?

2020 ◽  
Vol 4 (1) ◽  
pp. 77-102
Author(s):  
Abdelkader Derbali ◽  
Lamia Jamel ◽  
Monia Ben Ltaifa ◽  
Ahmed K. Elnagar ◽  
Ali Lamouchi
Keyword(s):  
Monetary Policy ◽  
Design Methodology ◽  
Commodity Markets ◽  
Portfolio Risk ◽  
Conditional Correlation ◽  
Predictive Capacity ◽  
Federal Funds ◽  
Content Type ◽  
The Us ◽  
Risk Managers

PurposeThis paper provides an important perspective to the predictive capacity of Fed and European Central Bank (ECB) meeting dates and production announcements for the dynamic conditional correlation (DCC) between Bitcoin and energy commodities returns and volatilities during the period from August 11, 2015 to March 31, 2018.Design/methodology/approachTo assess empirically the unanticipated component of the US and ECB monetary policy, the authors pursue the Kuttner's approach and use the federal funds futures and the ECB funds futures to assess the surprise component. The authors use the approach of DCC as introduced by Engle (2002) during the period from August 11, 2015 to March 31, 2018.FindingsThe authors’ results suggest strong significant DCCs between Bitcoin and energy commodity markets if monetary policy surprises are incorporated in variance. These results confirmed the financialization of Bitcoin and commodity energy markets. Finally, the DCC between Bitcoin and energy commodity markets appears to respond considerably more in the case of Fed surprises than ECB surprises.Originality/valueThis study is a crucial topic for policymakers and portfolio risk managers.

Prioritizing the forgotten generation: why organizations should make boomers a key part of their talent acquisition strategy in 2020

2020 ◽  
Vol 19 (3) ◽  
pp. 99-102
Author(s):  
Debra Squyres
Keyword(s):  
Baby Boomer ◽  
Vice President ◽  
Relationship Building ◽  
Leadership Roles ◽  
Job Market ◽  
Content Type ◽  
Diverse Workforce ◽  
Baby Boomer Generation ◽  
The Us ◽  
Talent Acquisition

Purpose Every day, nearly 10,000 employees in the Baby Boomer generation retire from the US job market. However, many in this generation are not ready for a quiet, traditional retirement and are choosing to remain in the workforce – simply on their own terms. With more employment opportunities open to candidates in the US job market than almost ever before, employers should prioritize engaging these seasoned hires in their recruitment strategies. Design/methodology/approach Beamery’s Vice President of Customer Success Debra Squyres reviewed the most important reasons employers should not disregard the “forgotten generation” of candidates in their hiring strategies, especially when considering the diverse skills and roles Baby Boomers can bring to an enterprising workforce. Findings Among other job-specific skills and experience, the greatest benefits of recruiting new hires from the Baby Boomer generation are the candidates’ years of experience and likely leadership roles, propensity for in-person relationship-building and unique perspective in an ever-diverse workforce. Originality/value Highlighting the greatest benefits of Baby Boomer hires to employers is especially beneficial for those organizational leaders managing talent acquisition and retention.

Central bank action will drive global equity markets

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Equity Markets ◽  
Economic Data ◽  
Equity Prices ◽  
Monetary Policies ◽  
Content Type ◽  
Market Sentiment ◽  
The Us ◽  
Us Monetary Policy

Significance This volatility is driven by expectations of further monetary stimulus in response to a slowing economy. Despite persistent concerns about the fallout from the anticipated tightening in US monetary policy and many country-specific risks, such as the standoff between Greece and its creditors, equity market sentiment remains supported by accommodative monetary policies worldwide and expectations of the US monetary policy tightening being gradual. Impacts Market volatility could increase further, as better-than-expected economic data in the euro-area vies with weaker-than-anticipated US data. Decoupling of surging equity prices and weak economic fundamentals threatens the rally's sustainability, increasing scope for volatility. This decoupling is most pronounced in China, where weak economic data prompt buying of equities in anticipation of stimulus measures. The greatest risk in equity markets is uncertainty surrounding US interest rates and their impact on emerging markets.

Further Mexico rate hikes likely in 2018

2017 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Federal Reserve ◽  
Content Type ◽  
The Us ◽  
Wage Increases

Subject Monetary policy moves. Significance The Bank of Mexico (Banxico) increased its target interest rate by 25 basis points, to 7.25%, on December 14, responding to a similar move by the US Federal Reserve (Fed) the previous day. The hike was the first to be taken under new Governor Alejandro Diaz de Leon and pushes the rate to its highest level since March 2009. Impacts Tighter monetary policy will weigh on growth in 2018 and may hit the PRI’s electoral prospects. More expensive credit will hit consumption moderately, as interest rates remain relatively low by historical standards. The possibility of wage increases edging up will feed inflationary expectations.

Indonesia will avoid economic crisis

2018 ◽  
Keyword(s):  
Monetary Policy ◽  
Federal Reserve ◽  
Presidential Election ◽  
Direct Investment ◽  
Current Account Deficit ◽  
Economic Nationalism ◽  
Content Type ◽  
Finance Minister ◽  
Global Trend ◽  
The Us

Subject Indonesia's economic headwinds. Significance Finance Minister Sri Mulyani Indrawati last week said the US Federal Reserve (Fed) should be careful about how its policies affect emerging markets. Tightening US monetary policy and a global trend of trade protectionism is straining Indonesia’s currency and current account deficit. President Joko ‘Jokowi’ Widodo will be eager to demonstrate that he can handle Indonesia’s economic challenges ahead of the presidential election in April 2019. Impacts Sri Mulyani’s message to the Fed is unlikely to have much traction in Washington. The force of economic nationalism will hinder Indonesia’s efforts to court more foreign direct investment. US trade reprisals on Indonesia would damage Washington-Jakarta diplomatic ties.

scholarly journals Spillover effect of United States Monetary Policy on Nigeria’s Financial and Macro Fundamentals

2020 ◽  
pp. 111-145
Author(s):  
Patterson C. Ekeocha ◽  
Elias A. Udeaja
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Policy Process ◽  
Inflation Rate ◽  
Spillover Effect ◽  
Spillover Effects ◽  
Conditional Variance ◽  
Quantitative Easing ◽  
External Shocks ◽  
The Us

This paper examines spillover effects of U.S monetary policy on macroeconomic fundamentals in Nigeria from January 1985 to December 2018. The study period is partitioned to account for conventional monetary policy (CMP) period, January 1985 to August 2007 and unconventional monetary policy (UMP) period, September 2007 to December 2018. Guided by relevant pre-tests, we find BEKK-VARMA-CCCMGARCH as the most appropriate model. The study finds significant spillover effects of U.S CMP and UMP on interest rate, exchange rate and inflation rate in Nigeria. We, however, observe that while CMP may be a significant accelerator of shocks persistence on interest rates and exchange rates, the extent to which the UMP accelerate shocks in inflation rate tends to vary for different measures of quantitative easing. Thus, in addition to past own shocks and past own conditional variance of these macro fundamentals, understanding their dynamics cannot be in isolation of their vulnerability to external shocks and volatility due to spillover effects of monetary actions in other economies. In formulating monetary policy, it is therefore, imperative for the Central Bank of Nigeria to monitor the monetary policy process of the US to hedge against shocks spillovers.

Fed move boosts tight Latin American monetary policy

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Latin American ◽  
Commodity Prices ◽  
Content Type ◽  
The Us ◽  
Capital Outflows ◽  
Government Bond Markets ◽  
The Impact ◽  
First Time

Subject The impact of US monetary policy tightening. Significance Following the US Federal Reserve's (Fed) historic decision to raise rates for the first time since 2006, the start of the Fed's monetary tightening cycle is accentuating the hawkish stance of Latin America's main central banks. This comes amid a dramatic sell-off in commodity markets, persistent concerns about China's economy and a severe deterioration in economic conditions across the region. Impacts EM asset prices have remained relatively resilient to the rise in US interest rates, in stark contrast to the 'taper tantrum' in 2013. Hitherto-resilient regional local currency government bond markets will face foreign capital outflows due to falling commodity prices. The Brazilian real is 2015's worst-performing major EM currency, but due largely to political and economic difficulties at home.

Turkey’s new economic team acts to restore credibility

2020 ◽  
Keyword(s):  
Monetary Policy ◽  
Stock Market ◽  
Interest Rates ◽  
Late Stage ◽  
Emerging Market ◽  
Content Type ◽  
Finance Minister ◽  
The Us ◽  
Multiple Interest ◽  
The Eu

Significance In one of the most significant changes in direction in a major emerging market (EM) in recent years, newly appointed TCMB Governor Naci Agbal has tightened monetary policy dramatically while abandoning a convoluted system of multiple interest rates. With another technocrat, Lufti Elvan, appointed finance minister, monetary policy could be returning to normality. Impacts A Biden administration is expected to prove unaccommodating towards Turkey, especially given its purchase of a Russian air defence system. This may be leading Erdogan to extend feelers to the EU, recently promising reforms and insisting Turkey is an “inseparable” part of Europe. Anti-coronavirus vaccines’ late-stage trial results are encouraging market optimism, with the US stock market hitting a record this month.

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