KER Commentary – Tue 3 Jan, 2017
Summary of central bank stimulus at this moment (via GS)
Here is a breakdown from Goldman Sachs that nicely presents that massive amount of stimulus measures undertaken around the world. These numbers are mind boggling when we realize that all this money has not been able to create any significant growth for economies around the world.
Maybe this year will be the year the the ECB winds down or starts to slow its QE program (as they are claiming they will do starting in March – which I do not believe). Or maybe the BOJ or ECB will completely run out of bonds to buy… The thing with the BOJ is that they have been playing this low interest game for over 20 years! Showing everyone that while the can may be dented (possibly permanently dented) it can continue to get kicked down the road…
If the Fed is actually on a rate hiking path, even if it is slow, I believe that the other central banks around the world are going to take note and slowly shift course. This is predicated on the Fed continuing down the rate hiking course and not implementing another QE program. We could be seeing a very slow transition in central banking policy for better or worse.