Why this ex-central banker fears a second (and even bigger) mistake

If there’s one group of people who cop a lot of flak in financial markets, it’s central bankers. Whether you believe they get too much or too little of it, they’re the ones who print the money and make decisions that influence the wallets of billions of people. That was particularly true in 2022, as many on the economic spectrum were caught unawares by the surge in inflation (and its persistence thereafter).

And depending on which central bank you most closely watch, they may also provide intentionally vague answers – or at least, avoid giving the direct and certain feedback you desire.

A beautiful example of this stems from Federal Reserve Chairman Jerome Powell. In his post-decision press conference last week, Powell argued “certainty is not appropriate”. In layman terms, he’s simply saying that singular data prints are not Gospel, even if financial markets may see otherwise.

Now, at this most crucial time in financial markets, EFG Bank Chief Economist Stefan Gerlach has granted us an exclusive interview about the state of the global economy and what central banks are doing as a result.

Gerlach was the Deputy Governor of the Central Bank of Ireland between 2011 and 2015. As part of this role, he also sat in on the meetings of the European Central Bank under its former President Mario Draghi.

You can read an edited summary below:

https://www.livewiremarkets.com/wires/why-this-ex-central-banker-fears-a-second-and-even-bigger-mistake

Timecodes:

1:00 – Why were central bankers caught so off guard by the inflation surge?
3:38 – Could central bankers have better forecast this mess?
4:51 – Did central banks react quickly and forcefully enough to avert a recession?
7:29 – Would you have handled things differently if you were still in your old role?
8:08 – What is the risk central banks will make a second big mistake?
11:17 – What advice would you give investors who want to understand central bank messaging better?
16:46 – Will the Eurozone avoid a deep recession?
18:42 – Will China’s reopening save Australia from the global recession?
20:12 – How has your asset allocation strategy changed?
23:47 – What’s one macro theme investors are not talking about enough?

Rules of Investing

Feb 05, 2023 • 25m

1x speed

Other episodes

Bob Desmond names his ”forever” stock

We're constantly told that diversification is the only free lunch in finance. Yet most of the world's top investors choose not to eat it.
Warren Buffett, Charlie Munger, John Maynard Keynes, Lou Simpson, George Soros. All run concentrated portfolios...

320 downloads Rules of Investing Sep 15, 2023

44m

Trailer: Bob Desmond, Claremont Global

We're constantly told that diversification is the only free lunch in finance. Yet most of the world's top investors choose not to eat it. Warren Buffett, Charlie Munger, John Maynard Keynes, Lou Simpson, George Soros. All run concentrated portfolios....

315 downloads Rules of Investing Sep 13, 2023

3 reasons why the US economy has achieved a miraculous ”soft landing”

Ten years ago, investing was an easy game. Thanks to rates near zero and reckless fiscal spending, markets were drunk on liquidity.
There was multiple expansion across the board, and winning was relatively easy. Pick an index, sit back and let multip...

411 downloads Rules of Investing Aug 25, 2023

38m

Blackwattle’s Ray David is raising red flags about market darling CSL

There are a select few stocks on the ASX that boast true market darling status. Whereas other stocks sell off at the hint of bad news, market darlings seem to emit an aura effect on markets that itself attracts investment.
Biotech company CSL is argu...

407 downloads Rules of Investing Aug 18, 2023

44m

Trailer: Blackwattle’s Ray David is raising red flags about market darling CSL

Hello and welcome to the Rules of Investing, brought to you by Livewire Markets, I’m your host David Thornton.
On the upcoming episode I sit down with Ray David, Portfolio Manager and Partner at Blackwattle Investment Partners. Alongside Joseph Koh, ...

377 downloads Rules of Investing Aug 16, 2023

Livewire Live is back in 2023!

Livewire Live is an investor event like no other where Australia’s most experienced investors will debate the critical topics in markets right now.
It is set to be an unmissable event with an exceptional lineup of speakers and innovative formats. Tic...

375 downloads Rules of Investing Aug 16, 2023

What do counting cars and delivering an 18% pa return for investors have in common?

There is a good reason why Australia’s sovereign wealth fund, the Future Fund, maintains a 16% allocation to private equity. Returns, returns, returns.
Private equity, and the lucrative returns it offers, has traditionally been the restricted domain ...

439 downloads Rules of Investing Aug 11, 2023

45m

Regal’s ultimate guide to microcap investing in 2023

If there is one request that we repeatedly receive from our audience, it’s that you want more content on the wonderful, often under-covered world of microcaps.
It makes cents (literally). These stocks usually fly under the radar of the masses, provi...

299 downloads Rules of Investing Aug 04, 2023

39m

Trailer: The ultimate guide to microcap investing in 2023

In the upcoming episode of The Rules of Investing, we're joined by microcap expert Jessica Farr-Jones, the portfolio manager of the Regal Emerging Companies Strategy*.
She shares why she is feeling bullish about the opportunity in small and micro cap...

392 downloads Rules of Investing Aug 02, 2023