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Central banks are pulling out all the stops to turn around the global economy.
They’re pumping money into their economies, creating negative interest rates and buying billions of dollars in bonds. Yet experts are worried some of these strategies will not be enough to turn around the slump in the world.
“Major central banks have run out of ammo,” says Ed Yardeni, chief investment strategist at Yardeni Research.
Central bankers are trying to stabilize their economies and currencies as they navigate through the volatility of the global slowdown, market meltdowns and investors pulling cash out.
But many admit they don’t know what to do next.
“The world is an uncertain place, and all monetary policymakers can really be sure of is that what will happen is often different from what we currently expect,” Stanley Fischer, the No. 2 at the U.S. Federal Reserve, said in a recent speech.
Fischer and other central bank leaders are arguably running out of new tools to turn things around. The European Central Bank could buy more bonds in a few weeks to stimulate the continent’s economy but its leaders know that’s not a long-term solution.
Despite their efforts, the global economy isn’t improving. The world can’t solely depend on central banks much longer.
“We can no longer rely on central banks,” investing guru Mohamed El-Erian, author of the new book “The Only Game in Town” recently told CNNMoney. “They’ve done all they can do and a bit more.”
Full article: Global central banks are running ‘out of ammo’ (CNN Money)