JawboningBack to Glossary
Jawboning is a practice, often resorted to by central bankers, where rhetoric is used to influence markets rather than officially changing economic policy. In the aftermath of the 2008 financial crisis central bankers often found themselves in this situation. With the global economy in tatters, interest rates at or even below zero, the only tool left to influence sentiment was speech. However, jawboning can only be resorted to for so long before its effects start to fade and markets start to demand real action.
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