With multiple actors steering their economies if different directions, following the movements of all the Central Banks can be tricky! So you don’t have to keep track of all the Monetary Policy Meetings, we put together a Macro Calendar for you that contains key dates, as well as other important macro economic events, such as Market Trading Hours, ETF dates and bond repayments for Chinese Property Developers.
Central Bank Monetary Meetings
Central banks use interest rates as a tool to control inflation. By raising or lowering rates, they can encourage or discourage spending, which in turn affects the rate of inflation. Central banks usually meet regularly to discuss monetary policy and decide on any changes to interest rates. The central bank’s decisions on interest rates can have a significant impact on the economy, so these meetings are closely watched by financial markets. Generally speaking, lower interest rates tend to boost economic activity, while higher rates can slow it down. Tech and growth stocks are amongst the sectors most heavily affected by interest rate rises. This is because a lot of their perceived value comes from future earnings and they use debt to grow quickly. If debt becomes more expensive, this can hinder growth.
Whilst Crypto has distinct differences from tech and growth stocks, around key central bank monetary announcements it can be highly correlated with tech and growth stocks.
Flipping the Bird
Doveish and hawkish are terms used to describe different approaches to monetary policy. Doveish policies are those that seek to keep interest rates low in order to stimulate economic growth. Hawkish policies, on the other hand, focus on inflation and seek to keep interest rates high in order to control prices. Central banks typically use a combination of Doveish and hawkish policies, depending on the current economic conditions. For example, during periods of recession, a central bank may pursue a Doveish policy in order to encourage lending and boost economic activity. Similarly, during periods of inflation, a central bank may adopt a hawkish policy in order to prevent prices from rising too quickly. Ultimately, the goal of monetary policy is to maintain stability in the economy.
National Bank, Global Influence
Around the world, central banks have different philosophies on interest rates and how they should be used to manage economies. In general, central banks will lower interest rates when they want to encourage economic growth and raise them when they want to slow things down. Central banks also have different levels of control over interest rates. Some, like the Federal Reserve in the United States, have a great deal of influence, while others, like the European Central Bank, have less. Regardless of the central bank’s philosophy or level of control, changes in interest rates can have a significant impact on financial markets.
The Federal Reserve generally has the most significant effect on global markets, simply because the US financial markets are the largest in the world. However, as global markets are so interconnected, decisions by any of the major central banks can quickly change sentiment.
The major and most closely watched central banks are:
U.S. Federal Reserve (FED)
European Central Bank (ECB)
Bank of England (BoE)
Bank of Japan (BoJ)
Swiss National Bank (SNB)
Bank of Canada (BoC)
Reserve Bank of New Zealand (RBNZ)
People’s Bank of China (PBOC)
Disclaimer: Nothing within this article should be misconstrued as financial advice. The financial techniques described herein are for educational purposes only. Any financial positions you take on the market are at your own risk and own reward. If you need financial advice or further advice in general, it is recommended that you identify a relevantly qualified individual in your Jurisdiction who can advise you accordingly.