Leaders of the major advanced economy central banks—the US Federal Reserve, the European Central Bank, and the Bank of Japan—must feel like the characters in Sartre’s existentialist drama. The only difference is that they have committed the cardinal sin of going down the road of unconventional monetary policies (UMPs), and they have discovered, after the fact, that there is no exit possible. There is yet more evidence that advanced economy UMPs are doing more harm than good. Recent evidence of selling in advanced economy bond markets suggests that an adjustment may already be under way, if only just. Like the characters in Sartre’s play, advanced economy central bankers are discovering, to their chagrin, that they have “no exit”.

Source: Mint September 25, 2016 17:03 UTC