Central banks: more aggressive, but no more credible
Our global vision of underlying macroeconomic trends is the cornerstone of a robust strategic asset allocation for Q2 2016. Our golden rules are high conviction, non-conformism and capital-preservation.
Equity markets have rebounded more than 15% from their February lows, but there are still signs of tension and global economic forecasts have been downgraded. Eight years after the financial crisis, markets and economies remain heavily dependent on monetary policy.
Lower interest rates and liquidity injections stimulated the US economy in the aftermath of 2008, but the same measures in Europe and Japan are struggling to deliver any sustained boost to activity. As a result, the ECB and BoJ have adopted increasingly unorthodox measures, using negative interest rates and buying private-sector non-fi nancial bonds. Even more noteworthy is the fact that some eurozone central bank offi cials are no longer ruling out helicopter money, i.e. distributing banknotes directly to households, in the hope of driving infl ation higher.