The Use of Financial Market Indicators by Monetary Authorities

In a new and changing environment for monetary policy, an interesting issue to examine is the use of financial market indicators by monetary policy authorities. With this in mind, the OECD canvassed a number of major central banks to get their views. This paper presents a synthesis of the responses and respects the confidentiality of individual central banks. Its main conclusions are as follows. In principle, financial market variables can provide additional information regarding the shocks that strike the economy, such as their perceived size and source as well as the process of feeding through the economy. A complementary function is to gauge market anticipations and reactions to policy changes, including the credibility of policy objectives. Regarding policy setting, monetary authorities are clearly aware of the dangers of mechanically targeting this information, which could lead to circularities. However, in some cases, they seem to find financial market indicators useful in ... Dans un environnement de politique monetaire nouveau et en pleine evolution, il nous a semble interessant d’examiner l’usage que les autorites de la politique monetaire font des indicateurs du marche financier. C’est dans cette optique que l’OCDE a sollicite l’avis d’un certain nombre de grandes banques centrales. Ce document presente une synthese de l’ensemble de leurs opinions, tout en respectant la confidentialite de chacune d’entre elles, dont les principales conclusions sont les suivantes. En principe, les variables concernant le marche financier peuvent fournir des informations supplementaires en ce qui concerne les secousses qui frappent l’economie, en ce sens qu’elles en percoivent l’ampleur, la source aussi bien que les repercussions sur le systeme economique. Une de leurs fonctions complementaires est d’evaluer les anticipations du marche et les reactions aux changements de politique, ainsi que la credibilite des objectifs politiques. Bien que les autorites monetaires ...