Speaker 1: Let's head to Hong Kong now and join in the
Speaker 1: current Bloomberg's Chief Asia Economics correspondent. Always a lot to
Speaker 1: talk about with Enda, but we're looking at these intervention
Speaker 1: warnings across Asia. The Bank of Korea going to buy
Speaker 1: up to two point one billion dollars of sovereign debt,
Speaker 1: and Indonesia and Japan, as we know, have stepped in
Speaker 1: to defend their currencies to so just tell us, I
Speaker 1: guess the flow on effects of the FED tightening here
Speaker 1: across Asia. Yeah, we do. You seem to be in
Speaker 1: a cycle now where the central banks are actively having
Speaker 1: to push back and fight against markets. Like you mentioned,
Speaker 1: they're either intervening to buy bond securities to keep down
Speaker 1: borrowing costs, or the intervening on the in the foreign
Speaker 1: exchange markets like we saw with Japan last week when
Speaker 1: I intervene, the government of Japan intervened to buy its
Speaker 1: own currency for the first time. Since it's not just
Speaker 1: an Asia phenomenon. Of course, we've seen the big dramatic
Speaker 1: news overnight with the Bank of England also having to
Speaker 1: intervene and by securities that the government, the British government
Speaker 1: sells there. So it's a powerful force. It's a powerful
Speaker 1: pushback when you have all of these monetary monetary authorities
Speaker 1: intervening markets. But does raised the question about ultimately who
Speaker 1: will win here, because if you're talking about fundamentals which
Speaker 1: are pointing to you know, securities moving in an ongoing
Speaker 1: direction will end. The view is that just little central
Speaker 1: banks can do about that, and that was one of
Speaker 1: the takeaways from the PBOC job awning the PBOUC job
Speaker 1: wanning last time as well. PBC comment and said, listen,
Speaker 1: you can't have a one way beat against you. One
Speaker 1: need direction. That's fine, but some economists were responding by saying,
Speaker 1: hang on, with the FED and PBUC going in such
Speaker 1: opposite directions, and with the Chinese economy in the state
Speaker 1: that it is, all of that obviously means that currency
Speaker 1: should be weaker and that would make it very hard
Speaker 1: for the PPUC to push back. Let's just get back
Speaker 1: to the Bank of England because that has been a
Speaker 1: huge shock, I guess to market participants. Bank of America
Speaker 1: saying that essentially this is highlighted the impossible trinity of
Speaker 1: liquidity issues that are plague in global interest rate markets.
Speaker 1: Do you think the BOE has has done enough and
Speaker 1: what could happen next. Well, let's say obviously now during
Speaker 1: a curious set of circumstances, because you have a couple
Speaker 1: of things happening at once. You have the government, you know,
Speaker 1: put putting more money into the economy, bringing down taxes
Speaker 1: and more and and pulling levers who support growth. You
Speaker 1: have the central bank raising borrowing costs in an effort
Speaker 1: to bring down inflation. But now you also have the
Speaker 1: central bank stepping into the financial market to bring down
Speaker 1: boring costs and ensure that the market has floated with
Speaker 1: liquidity and to ensure that there is a financial crisis.
Speaker 1: So you have the government and the central bank pulling
Speaker 1: against each other. But even within the central bank, you
Speaker 1: have the central bank pulling against central bank because it's
Speaker 1: doing two different things at the same time. So look,
Speaker 1: it's clearly and modeled policy there at the moment. It
Speaker 1: probably at the very least does suggest in the case
Speaker 1: of the UK, that the Bank of England will have
Speaker 1: to hike interestrates by a big amount whenever they when
Speaker 1: they do meet the next sor if they decide to
Speaker 1: go ahead of the meeting. Most anilests now seem to
Speaker 1: be talking about maybe a big one hundred Bates points
Speaker 1: hike there to try and push back against the inflation impact.
Speaker 1: But as I say, rightly or wrongly, without getting into
Speaker 1: the politics politics or the ideology of a policy mix,
Speaker 1: the end result is that the markets are seeing it
Speaker 1: as a model, they are rejecting it, and now you
Speaker 1: have policy pulling in different directions and are always a pleasure,
Speaker 1: Thank you and the Karen is Bloomberg's chief Asia Economics
Speaker 1: correspondent with us in our Hong Kong studios