Markets Play Second Fiddle as Central Bankers Take Message to the Masses

Financial markets took a back seat Tuesday as the world’s leading central bankers spoke of stepping up efforts to communicate with the masses.

It's rare to get four of the world's four biggest central bankers hitting the stage at the same time, as was the case in Frankfurt Tuesday.

The Central Bank Communications Conference takes place on Tuesday, 14 and Wednesday, 15 November 2017 in Frankfurt and currency markets were watching the panel closely this Tuesday, where the following Governors took to the stage:

Mark Carney, Bank of England
Mario Draghi, European Central Bank
Haruhiko Kuroda, Bank of Japan
Janet Yellen, Federal Reserve

Those who tuned in hoping to catch a hint of the next likely move from either of the developed world’s four largest central banks were left disappointed.

“One of things you heard from my colleagues and you’re about to hear from me is we’re speaking to the people we serve first, the markets are almost...,” says Mark Carney, governor of the Bank of England. “It’s about about getting through to households.”

The governors and chairpersons focused much of their answers to panel questions on stressing recent efforts to improve communications with laymen on main street.

“Most members of the public are not fixated on what’s going to happen at the next meeting, or whether it’s going to be two or four rate increases next year, but they do want to know that we’re going to meet our inflation target and fulfill our employment mandate,” says Janet Yellen, chair of the Federal Reserve.

If deepening or improving the way in which policymakers communicate with financial markets is on the agenda of either central bank chief in attendance, they could have fooled Tuesday’s audience.

“We put out a 50 page inflation report, expert audiences read them, digest them and respond to them,” adds Mark Carney, BoE governor. “That’s not the way to communicate with the public in a world that’s had enough of experts - to borrow a term from the UK.”

Carney, Yellen, ECB chief Mario Draghi and BoJ governor Haruhiko Kuroda each took turns detailing the various digital projects, such as new websites and social media channels, that now form the core of their communications efforts.

Both the European Central Bank and the Bank of England had more to crowe about than the others when it came to to number of new web-portals their respective institutions have in place, through which citizens can interact with the central bank, but none had anything to offer traders and journalists who might have hoped for a hint on future monetary policy.

Wednesday and Thursday will bring a range of speeches from other Bank of England officials. Chief economist Andy Haldane and deputy governor Ben Broadbent will speak at different events over the course of Wednesday.

MPC members David Ramsden and John Cunliffe will appear at a Liverpool conference alongside governor Mark Carney on Thursday.

Any of these speeches could offer further insight into the current thinking of policymakers ahead the MPC’s Thursday, 02, December meeting. Markets will listen closely for further clues as to when the bank might be likely to raise interest rates again.

The Bank of England hike the base rate by 25 basis points, to 0.5%, in November as part of an effort to rein in rising inflation.

Separately on Tuesday, Office for National Statistics figures showed consumer price growth stalling at 3% during October when economists had forecast a further increase.

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