Economics
Do-It-All Central Banks Risk Rates Flexibility With New Mission
- Old, inflation-focused missions being substantially diluted
- Flexibility in discussion seen as key to maintain independence
The Marriner S. Eccles Federal Reserve building in Washington, D.C.
Photographer: Stefani Reynolds/BloombergThis article is for subscribers only.
Central bankers are engaged in the most sweeping rethink of their role in decades, spurred by the success of tight collaboration with governments in countering the pandemic crisis and a new political reality of increased demands on monetary policy makers.
The Federal Reserve, European Central Bank and emerging market counterparts like Bank Indonesia are among those that enabled fiscal authorities to ramp up emergency spending without driving borrowing costs up, through large-scale bond purchases.