29 Mar Fixed Income Perspectives – ‘The Big Dance’
Voya Investment Management – Fixed Income Perspectives – end March 2016
As the (U.S.) 2015–16 college basketball season approaches its climax on the court, developed market central banks have engaged in a bit of March Madness of their own, turning to new pages of their monetary policy playbooks as they struggle to bolster economic growth, inflation and labour productivity.
Challenged by the increasing ineffectiveness of traditional monetary policy approaches, the G3 central banks are doing their best to be innovative. The Bank of Japan went negative with its key policy rate while at the same time maintaining positive rates on certain bank reserve assets. Designed to stimulate the economy without hurting the banking system, this strategy hasn’t worked.