Covid Crisis Brings Regime Change For World’s Central Banks

Just eight months after they swung into action to avert a crippling depression and credit crunch, central banks are in the uncomfortable position of relying on governments to power fragile economic rebounds. The decisions their counterparts make will affect not just the growth outlook for the next few quarters, but could shape central banks’ policy options, and even their credibility, for years to come. Monetary authorities entered the Covid-19 crisis with the least conventional policy space -- namely, interest-rate cuts -- of any postwar downturn. After pulling down borrowing costs near or even below zero and deploying massive asset-purchase programs, they are now practically begging governments to step up. Without aggressive fiscal stimulus now, the danger is that economies develop deep scars that hobble growth over the longer term.

from FA News https://www.fa-mag.com/news/covid-crisis-brings-regime-change-for-world-s-central-banks-58935.html