Summary

A recent article on the ECB noted the diminishing returns of ‘unconventional’ the monetary policies which, following the Great Recession, have paradoxically become a standard component of central banker toolboxes worldwide.

Some of these diminishing returns were on open display as US Federal Reserve Chair Jerome Powell held a news conference on Thursday. Despite what was by many accounts an extremely dovish outlook from the Fed, US traders still rushed to the exits and equity markets closed the session deeply in the red. It would seem that the old maxim of C. Northcote Parkinson – “A luxury, once experienced, becomes a necessity” – increasingly applies here.