Central bank cavalry can no longer save the world

In 2008 central banks, led by the Federal Reserve, rode to the rescue of the global financial system. Seven years on and trillions of dollars later they no longer have the answers and may even represent a major risk for the global economy.

Central bank cavalry can no longer save the world 2015_10_10t192612z_1_lynxnpeb990dz_rtroptp_2_imf_g20-1b1ipth

Central bank cavalry can no longer save the world 2015_10_10t192612z_1_lynxnpeb990dz_rtroptp_2_imf_g20-1b1ipth

A report by the Group of Thirty, an international body led by former European Central Bank chief Jean-Claude Trichet, warned on Saturday that zero rates and money printing were not sufficient to revive economic growth and risked becoming semi-permanent measures.

"Central banks have described their actions as 'buying time' for governments to finally resolve the crisis... But time is wearing on, and (bond) purchases have had their price," the report said.

In the United States, the Federal Reserve ended its bond purchase program in 2014, and had been expected to raise interest rates from zero as early as June 2015.

But it may struggle to implement its first hike in almost 10 years by the end of the year. Market pricing in interest rate futures puts a hike in March 2016.

https://au.news.yahoo.com/world/a/29778526/central-bank-cavalry-can-no-longer-save-the-world/

Central bank cavalry can no longer save the world

Central bank cavalry can no longer save the world

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