With interest rates still at extremely low levels, what will central bankers do when the next recession comes along?
Just take those interest rates negative.
Iain Stealey serves as Head of global aggregate strategies at JPMorgan Asset Management in London. He raised the specter of negative rates during a recent interview with Bloomberg.
I don’t think the central bankers would like to go back into negative rates once they get out of it, but the reality is they may well have to during the next recession.’
Even now, the number of negatively yielding bonds continues to grow. According to Bloomberg, market value of the world’s bonds with negative yields has jumped almost 25% over the past month, rising to $8.6 trillion. This despite the Fed raising rates and talking about reducing its balance sheet.
This post was published at Schiffgold on AUGUST 15, 2017.