Monthly Market Report - March 2019

1st March 2019

Of one thing I am increasingly certain. If and when the next big market crash comes – and its probably a matter of when not if – a new, more drastic form of quantitative easing will make its debut. It’s implications for risk assets and bonds is obvious – in effect there’ll be a price support under current valuations, especially bonds. I’m not alone in thinking this is coming. The City’s favourite bear Albert Edwards at SocGen for instance reckons that central bankers will first deploy negative interest rates. He points to a paper from the San Francisco Fed titled "How Much Could Negative Rates Have Helped the Recovery?”. According to Edwards, the paper makes the case that if the Fed had cut Fed Funds further, negative interest rates would have helped push CPI inflation back up to target much quicker, as the economy would have been stronger (see chart below).

Download the full Monthly Market report here
Thank you. Your details have been added to our mailing list.