Courtesy of Pam Martens.
Mark Carney, BOE Governor, Testifying Before Parliament on June 24, 2014
The tabloids in London are having a field day today with headlines calling Bank of England Governor, Mark Carney, an “unreliable boyfriend” – a remark made yesterday by MP Pat McFadden during a hearing of the Treasury Select Committee of Parliament over the mixed signals Carney is sending the market about the timing of interest rate hikes by the BOE. (Carney, a Canadian and former head of the Bank of Canada, where he masterfully steered the Canadian economy through the financial crisis, might be forgiven for alternately thinking he’s on a bad blind date in his current assignment.)
Carney suffered a withering grilling yesterday over a speech he delivered on June 12 in which he said “There’s already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced. It could happen sooner than markets currently expect.” (See full text of speech linked below.)
The real stunner of yesterday’s hearing, however, and the import of its underlying message, came at almost the end of the session in response to questions from MPs John Thurso and Stewart Hosie. Carney, who is also Chairman of the G20 Financial Stability Board, raised the very real possibility that the big asset purchases that have inflated both the BOE’s balance sheet as well as created a $4 trillion balance sheet at the U.S. Fed, are not going to be fully unwound – they are the new normal.
Thurso started off with this line of questioning:
John Thurso, Member of Parliament's Treasury Select Committee
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