How central banks might deal with the next downturn | Metals Mine

  • How central banks might deal with the next downturn

    From blackrockblog.com

    Elga discusses the challenges facing central bankers when the next downturn comes – and makes some unprecedented policy suggestions. This is the first in a series of four blogs on the topic of “Dealing with the next downturn.” Unprecedented policies will be needed to respond to the next economic downturn. Monetary policy is almost exhausted as global interest rates plunge toward zero or below. Inflation expectations are dragging on actual inflation. See the chart below. Fiscal policy on its own will struggle to provide major stimulus in a timely fashion given high debt levels and the typical lags with ... (full story)

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AiWoZhongHua
Aug 21, 2019 12:54am
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Quoting EventsTrader
According to Fed's Rosengren: "Next recession will very likely see quantitative easing from the FED"
They may even have to find more "creative" ways to get out of next recession, since we've seen the marginal utility of QE decreases a lot. On top of that, the FED still hasn't unwinded past QEs as of today...

I see neg rates as the obvious first action to counter next recession.
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EventsTrader
Aug 20, 2019 7:45pm
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This article makes me a strong case for shifting into a higher allocation of gold for safety, if you believe a recession is coming. I'm not sure the Fed will deal with a downturn as well as it did under Bernanke.

According to Fed's Rosengren: "Next recession will very likely see quantitative easing from the FED"
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