Negative Interest Rates Show Desperation of Central Banks
WashingtonsBlog.com
January 29, 2016
Japan has joined the EU, Denmark, Switzerland and Sweden in imposing negative interest rates.
Indeed, more than a fifth of the world’s GDP is now covered by a central bank with negative interest rates.
The Wall Street Journal notes:
TOKYO—Japan’s central bank stunned the markets Friday by setting the country’s first negative interest rates, in a desperate attempt to keep the economy from sliding back into the stagnation that has dogged it for much of the last two decades.
BBC writes:
The country is desperate to increase spending and investment.
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Japan has been desperate to boost consumer spending for years. At one point it even issued shopping vouchers to stimulate demand.
The New York Times writes:
Moving to negative rates reflects a measure of desperation on the part of central banks. Their traditional tools have been largely exhausted, as most countries’ interest rates have been pushed to almost nothing.
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