Blackrock Investments, Stanley Fischer, Sarek discussed on Bloomberg Best


Not lead to prosperity and so what we have today his confidence is being undermined you seated investment spending this is starting to hit the economy as a whole and it's starting to reflect itself in markets we also have the particular issue that if there were to be a recession it's not clear at all what the policy response would be the problem of being out of ammunition I think as an additional concern to markets and is an additional explanation why we see these extreme movements in the yield curve and interest rates general crock blackrock investments she has a wonderful paper out cold in a dealing with the next downturn from unconventional mock unconventional monetary policy to unprecedented policy coordination now one of the authors is also Stanley Fischer a former fed again does the inverted yield curve have an impact on central banks and the markets worry about central banks inability to deal with it desserts for politicians to spend money the point of the paper here is that more of the same in terms of monetary policy is unlikely to be an appropriate response if we get into a recession or sharp slowdown to the questions what comes next and I think that what we're facing is there's no framework at the moment it is not at all clear with central banks would do particularly those that are already at the at the zero lower bound to deal with a situation like this so what we're proposing is the next step has to be something else than just more of the same something that goes into the direction of essentially what we call going direct which would be ways of putting money into the pockets of consumers corporate Sarek clean orders spend so to go around the interest rate channel as opposed to the traditional central banking.

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