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A monitor on the NYSE floor displays Federal Reserve chairman Jerome Powell. Photo: Drew Angerer/Getty Images

Central bank guidance is increasingly falling on deaf ears in the market as more investors position for looser monetary policy no matter what policymakers say. And as the year has progressed, central banks all over the world have moved towards those dovish expectations.

Why it matters: The idea behind forward guidance is it allows central banks to influence market expectations without taking action. But the market has lost faith in the forward guidance of the Fed, European Central Bank, Bank of Japan and central banks from Mexico to Sweden.

  • This is a major problem given that credibility is a foundational bedrock of central banks' ability to execute their primary function — maintaining price stability.

What to watch: Not a single major central bank has raised interest rates so far this year and the Reserve Banks of India and New Zealand have cut rates by 25 basis points, notes Capital Economics Head of Global Economics Service Jennifer McKeown.

  • "We still believe that central banks in the advanced economies will need to do more than make pledges if they are to stand any chance of reinvigorating their economies and hitting their inflation targets."

Go deeper: The Fed is sounding the alarm on leveraged loans

Go deeper

10 hours ago - World

Maximum pressure campaign escalates with Fakhrizadeh killing

Photo: Fars News Agency via AP

The assassination of Mohsen Fakhrizadeh, the architect of Iran’s military nuclear program, is a new height in the maximum pressure campaign led by the Trump administration and the Netanyahu government against Iran.

Why it matters: It exceeds the capture of the Iranian nuclear archives by the Mossad, and the sabotage in the advanced centrifuge facility in Natanz.

Scoop: Biden weighs retired General Lloyd Austin for Pentagon chief

Lloyd Austin testifying before Congress in 2015. Photo: Chip Somodevilla/Getty Images

Joe Biden is considering retired four-star General Lloyd Austin as his nominee for defense secretary, adding him to a shortlist that includes Jeh Johnson, Tammy Duckworth and Michele Flournoy, two sources with direct knowledge of the decision-making tell Axios.

Why it matters: A nominee for Pentagon chief was noticeably absent when the president-elect rolled out his national security team Tuesday. Flournoy had been widely seen as the likely pick, but Axios is told other factors — race, experience, Biden's comfort level — have come into play.

Updated 12 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: Supreme Court backs religious groups on New York COVID restrictions.
  3. World: Thailand, Philippines sign deal with AstraZeneca for vaccine.
  4. Economy: Safety nets to disappear in December Black Friday shopping across the U.S., in photosAmazon hires 1,400 workers a day throughout pandemic.
  5. Education: National standardized tests delayed until 2022.