Past, Present and Future.. Central Banks Decisions
During a speech before the House Budget Committee held by Ben Bernanke in Washington this past week, the Federal Reserve Chairman stated the importance of pushing the US fiscal policy on a sustainable path. “Interest rates can sour quickly if investors lose confidence in the ability of the government its fiscal policy,” he pointed out.
Bernanke warned that the strength of recovery in the US was “frustratingly slow” and that reducing debt should be of
crucial importance, as its current levels make the economy more susceptible to shocks. The Chairman emphasized that attaining a sustainable government debt to national income ratio should be a top priority on the fiscal policymakers agenda.
Bernanke also listed the Eurozone crisis as an important risk to the US economy. He said that all the necessary steps will be taken to protect the US financial system from the fallout.
Bank of Japan Governor Masaaki Shirakawa said presently that he acknowledges that the economy is in a severe situation due to deflation and a strong yen, signalling the central bank’s readiness to offer further monetary stimulus if Japan’s fragile economic recovery is threatened.
But Shirakawa pushed off criticism that the BOJ was not easing monetary policy as quickly as the Federal Reserve, stressing that both central banks share similar goals and look not just at price growth but at ensuring sustainable economic growth.
“We acknowledge that the problems Japan faces such as the current deflation and yen strength are very severe,” Shirakawa told an upper house budget committee meeting on Monday. “The BOJ will implement appropriate steps through close examination of the economic situation,” he said.
In the near future The chance of another interest rate cut by the Reserve Bank of Australia tomorrow is decreasing. 
Until recent local economic data, the odds were heavily in favour of the RBA making it three rate cuts in a row when its monetary policy board meets.
Surprisingly strong jobs news from the US, though, and broad-based market rallies since the start of the year have given the central bank scope to delay another cut.
The Bank of Englands’s Monetary Policy Committee is set to come forward in the future (Thursday) and state that it is expanding its Quantitative Easing programme from ?275bn to ?325bn. Several members of MPC signalled at their January meeting that they would vote for a further round of QE this month
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