Economics
Markets Signal Central Banks Are Losing `Awe' Even If They Shock
- `No question' policy makers were effective in crisis years ago
- Focus turns to G-20 finance chiefs meeting in Shanghai
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Central banks are running into diminishing returns from their use of easy monetary policies, seven years after first championing quantitative easing to save the world from depression.
The new reality is clear across global financial markets: The Standard & Poor’s 500 Index reached a 22-month low in the U.S. Tuesday, and Japan’s benchmark equity index careened on toward levels unseen since 2014, while the yield on the country’s 10-year bonds dipped below zero for the first time. Stocks also slid in Europe, where memories of the region’s debt crisis are being stirred by rising bond yields in Portugal and a slide in Greek banks.