Monetary Policy Dramas and Surprise

Are you feeling the information overload regarding inflation discussions?

Are you searching for the ability to find when central banks and other policymakers start worrying about demand destruction through the consumption and GDP growth channels?

What happens when data-dependent central bankers determine that high interest rates are not having the desired impact on consumer demand and economic growth rates?

Do you wake up in the morning worried about what kind of headline risks await you and your portfolio regarding the monetary policy environment?

We have good news. Award-winning, patented technology is here to help. Our PolicyScope data can help you spot the signal amid a crowded, noisy news cycle.

It is no secret that policymakers in general and central bankers in particular have been fixated on rampant inflation during 2022. Their policy efforts to contain inflation include a sophisticated communications campaign to describe their commitment to curb inflation.

But savvy analysts know that spotting policy pivots requires dedicated attention to two additional economic policy priorities: consumption and GDP growth. These two areas will provide signals about whether and when hawkish monetary policy globally will start to slow inflation through the consumption channel and when demand destruction might begin as visible through GDP growth.

Not surprisingly, the dynamic through 2Q and 3Q2022 has seen inflation dominate central bank communications, as noted in the PolicyScope macroVS1 charts above.

But note the perceptible uptick in policymaker action regarding GDP growth and consumption during September. But the volume of activity regarding these issues is significantly lower than for inflation (for understandable reasons). Policymakers are having a more nuanced discussion.

Strategic analysts and portfolio managers seeking to stay in tune with policy shifts as they occur can access this data and the underlying language through our Bloomberg Terminal App {APPS PLCY <GO>} or through our interactive dashboard.

Volatility traders and discretionary portfolio managers seeking to generate their own portfolio alerts and parameterization adjustments can receive daily data feeds from a dedicated S3 bucket and API.

You don't have to navigate the coming monetary policy storm without a compass.

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Starting soon, public policy data will easily align with your automated workflows regarding:

  • currencies (reserve and digital)

  • fixed income (including sovereign fixed income)

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