October, 29 2015 by lsr team

Japan’s central bankers are locked in the same vicious cycle as the rest of the world. The US in isolation could easily have raised rates by now, but the rest of the world is not ready and is now big enough to give the Fed cause to pause. However, unwilling to relinquish their grip on America’s coat tails, central banks outside the US have responded to Fed hesitation by lowering the bar, pushing interest rates below zero and devaluing currencies. The result is a race to the bottom. Japan’s QE is already huge and expanding the programme would hasten the...

September, 04 2015 by lsr team

Recent falls in equity markets have reignited the debate about the appropriateness of monetary tightening in the US and elsewhere. Those economists committed to a ‘secular stagnation’ view of the global economy perceive recent market falls as a vindication; how could the Fed, or indeed the Bank of England, be considering raising rates from emergency levels when there is still clearly an emergency? Yesterday was the turn of Mario Draghi and the ECB to make their contribution to this debate. While recent euro strength will be a concern, the ECB’s QE progr...