Why not wait to get hard data, and then carefully calibrate any monetary response to maximize the effectiveness and minimize the negative side effects?
by Kristin Forbes
“Keep calm and carry on” is a good motto to live by—as well as a good strategy for monetary policy.
The initial market reaction to the UK vote to leave the European Union was more panic than calm. UK-focused equities fell by 11pc in one day.
Sterling experienced its sharpest two-day fall ever. Global markets also responded sharply But markets functioned efficiently, processed these large price swings, and “carried on”.
The largest price movements have since moderated. Sterling has recovered one quarter of its post-referendum fall. Most major global stock markets (including the FTSE) are now higher than before the vote.