Central Banks: Zero interest rate policies to petrify their life

All major central banks are at the zero bound. Low rates for a prolonged period stifle economic growth, according to FXStreet’s analyst Joseph Trevisani.

Key quotes

“None of the three major central banks, the BoJ, the ECB and the Fed, that have used very low or negative rates to promote economic growth has had appreciable success with their monetary policy innovations yet they continue to turn to the rate tool in every threatening situation.”

“Japan has an interest rate policy which does not stimulate its slow growing economy, which will not be changed to eliminate the accreting business deadwood and which cannot provide a cushion for turmoil and recessions.”

“Once zero rates have infiltrated the economic processes they become almost impossible to eliminate without an extraordinary effort, as the BOJ discovered more than a decade ago and which the ECB is about to find out in the eventual aftermath of the Coronavirus pandemic.”