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Should the Fed Raise Its Inflation Target?
Financial markets, and perhaps the global economy, seem to be reaching a crossroads where it appears that central banks have exhausted their abilities to support real growth with the toolkit currently being used. The most recent example of unconventional monetary policy not doing what was expected is the move of the European Central Bank (ECB) and now the Bank of Japan (BOJ) to enact negative nominal interest rates. Financial markets have responded to negative interest rates with destruction in bank equity and debt valuations, a drop in global inflation expectations and no particular depreciation of the respective ... (full story)