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Photo credit: Bank Of International Settlements
The central banks’ bank—the Bank for International Settlements—says there’s a global economic storm on the horizon, one caused by governments running out of monetary-policy options.
BIS economists say in recent reports that the recent quarter’s stock selloffs and global market turmoil may be signs of underlying economic vulnerability, rather than isolated tremors.
They add that more central banks will likely move to negative interest rates to combat the turmoil, given that so many already have rates near zero.
Negative rates have seen mixed results—while Sweden’s negative rate experiment seems to be on the right path, Bank of England governor Mark Carney recently warned the G20 that they put a damper on global growth. [BI]
