The catchy title of the meeting is “Designing resilient monetary policy frameworks for the future.” One for pointy-headed wonks if ever there was one.
The meat of the meeting will be twofold.
First, the likelihood of the Fed raising interest rates by the end of the year. Back in January people were talking about possibly four rises in US rates this year.
Now it is down to will it move in December or wait until early 2017? In a world of lower and longer rates and quantitative easing on a massive scale what the world’s largest economy does matters to everyone.
Second, Brexit. This is the first meeting of central bankers since the UK voted to leave the EU.
Mark Carney is not going but his deputy Minouche Shafik is. We should wish her good fishing in the land of cut-throat trouts.
Woodford’s plan may not pay off
Neil Woodford has always been good at grabbing headlines in the world of fund management. Now he’s doing it again with the decision to end bonuses at his firm Woodford Investment Management.
Or, to be fair, with the 35-strong staff’s decision to move from variable compensation to fixed salaries starting this year.
It is an admirable move but one which is unlikely to be followed by much of the industry.
It also throws up a couple of potential problems.
If the firm has a bad year it cannot reduce costs by slashing bonuses.
And if one manager within the firm does spectacularly better than colleagues, what’s to stop them being poached by one of those nasty rivals still offering a guaranteed bonus?
