Financial institutions provide a variety of services to their customers. These services include banking, investment, insurance, and even unsecured personal loans. Unsecured personal loans typically feature lower interest rates than other types of loans, making them an attractive option for those seeking a loan. Personal loans are funds borrowed from a financial institution that are typically used for debt consolidation, home improvements, medical expenses, and more. However, there is one feature that is not commonly found in a financial institution - central banking.
Central banking is the practice of a country's central bank setting monetary policy and regulating the banking sector. Central banks are responsible for setting the benchmark interest rates for their respective countries, and this is a key factor in determining the cost of borrowing for consumers. The Central Bank of Armenia recently announced that central banks can start to regain their role as the main monetary authority. This was a factor that many advanced economies did not take into account when the pandemic began, and it is now becoming increasingly important as the global economy recovers.
The entire stock market narrative changed on Wednesday following Jerome Powell's Brookings Institution speech. We've got our first sign that the Federal Reserve is willing to take a more proactive stance in setting monetary policy. Powell's speech was a clear indication that the Fed is ready to start using its monetary tools to support the economic recovery. This could potentially mean lower borrowing costs and more liquidity in the markets, which could be a major boon for stock prices.