Message: *Ho*Ho*Ho*

August 20, 2019

“We think it’s premature to declare inflation to be dead...”

“We could still see more unorthodox policies, like ‘helicopter money’.”

PIMCO's words (and actions, we presume), echo a report from BlackRock, co-authored by Philipp Hildebrand, Stanley Fischer and Jean Boivin, pointing out that central banks have limited firepower left in their monetary armory, and that fiscal policy is constrained by still-high debt levels. The trio concluded that “unprecedented policies will be needed to respond to the next economic downturn”. The report added:

“Without a clear framework in place, policymakers will inevitably find themselves blurring the boundaries between fiscal and monetary policies... This threatens the hard-won credibility of policy institutions and could open the door to uncontrolled fiscal spending.”


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