CentralBanks

How Central Banks ‘Talk’ Markets – Interpreting Guidance Without Overtrading

How Central Banks ‘Talk’ Markets – Interpreting Guidance Without Overtrading

Many central bank statements are deliberate signals, and you should parse policy intent, data conditionality and messaging tone rather than fixating on single phrases; doing so prevents overtrading that erodes returns and lets you use clear guidance to position appropriately, keeping your risk sizing and timing disciplined.Understanding Central Bank Communication The Role of Central Banks You should treat central banks as both policy makers and market communicators: the Federal Reserve balances a dual mandate of 2% inflation and maximum employment, the European Central Bank prioritizes price stability, and the Bank of England targets 2% inflation as well. Their decisions at…
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