-
The Dramatic Rise in Energy Prices is Ultimately Deflationary
The Swiss had imposed negative rates on foreign currency deposits in the 1970s to counter the upward pressure on the franc, but Denmark became the first central bank to put its policy rate below zero in 2012. There are now around $11.8 trillion of negative-yielding bonds, the least, incidentally, since mid-2020. At the end of 2019, the value of bonds with a negative yield was slightly below $11.3 trillion. Nevertheless, the meaning and implications of negative-yielding interest rates continue to vex even the most seasoned of market participants. An unusual confluence of factors saw oil prices in April 2020 drop below ... (full story)