John Gieve: BOE's 'Played Its Hand' in Terms of Rates

The video discusses the impact of negative interest rates on currencies, particularly in Switzerland, and the broader economic implications. It explores the dynamics of interest rates in the US, the rise of Libor, and the effects of new market regulations. The discussion also covers the challenges faced by central banks, including the Bank of Japan and the Federal Reserve, in managing monetary policy and the potential for policy mistakes.

What is one of the main effects of negative interest rates on banks?

• They lead to higher inflation.

• They stabilize the domestic economy.

• They act as a tax on banks.

• They increase bank profits.

What is causing upward pressure on yields in the US?

• New regulations affecting institutional prime funds.

• Decreasing demand for short-term paper.

• A decrease in the Libor rate.

• Increased government spending.

Why is the rising Libor rate considered significant by some experts?

• It indicates a crisis similar to Lehman in 2008.

• It shows a repricing of credit affecting banks.

• It leads to a decrease in commercial paper borrowing.

• It results in lower interest rates globally.

Which central bank is currently facing the most challenges according to the discussion?

• The Bank of Japan

• The European Central Bank

• The Bank of England

• The Federal Reserve

What is the Federal Reserve's current struggle regarding interest rates?

• Implementing new regulations for institutional funds.

• Competing with the Bank of Japan's policies.

• Balancing rate normalization with signs of a downturn.

• Deciding whether to increase or decrease rates.