The current coronavirus pandemonium means attempts by central banks to normalise interest rates since 2008 have failedA man in Chinatown, London, on March 13 2020. Picture: GETTY IMAGES/DAN KITWOOD
That means the attempt by central banks at normalisation of interest rates since the 2008 financial crisis has effectively failed. A spate of rate cuts in recent days shows a return to zero interest-rate policy across all G7 economies is now on the cards.JPMorgan reckons that what it only recently saw as a “risk scenario” of the US joining Europe and Japan in the zero bond-yield club is now “much closer to reality”.
“Financial markets are not the provider of capital or a judge of economic and corporate health they once were: markets are managed by policymakers,” Rayner says.