TOKYO — Punchbowls everywhere are becoming endangered species as central bankers scramble to yank them away with increasing urgency. Nowhere more so than here in Asia.
This metaphor is courtesy of William McChesney Martin, the US Federal Reserve’s longest-serving chairman who held the position from 1951 to 1970. He famously said a monetary authority’s role is that of a “chaperone who has ordered the punchbowl removed just when the party was really warming up.”
Since the 2008 Lehman Brothers crisis, the catchphrase markets most associate with central banks is “whatever it takes.” Mario Draghi, then-president of the European Central Bank, famously uttered these words in July 2012 amid debt-market turmoil on the continent. A year later, Bank of Japan Governor Haruhiko Kuroda would embrace a similar mantra.
Today, officials are racing to do what they can to tame inflation and keep up with current US Federal Reserve Governor Jerome Powell’s tightening cycle.