Central banks are being very mixed in their guidance to the market, with the Bank of England governor saying three months ago that the need for zero interest...

Perpetual Equity Investment Company

Perpetual Asset Management (Australia)

Central banks are being very mixed in their guidance to the market, with the Bank of England governor saying three months ago that the need for zero interest rates was passing, but now saying that inflation is set to decline and as such they don't want to leave the economy vulnerable to shocks. After having lowered inflation and inflationary expectations for several decades, central banks are struggling to lift inflation other than through currency manipulation, which is not the type of inflation which leads to higher wages, higher profits and which eases debt burdens. Imported inflation is good for profits (as margins increase), but not for economies (as growth remains dormant). It appears that after being masters of the universe for 25 years, that the central bank leverage model is broken as there is simply too much debt in the world, and central banks can't stimulate the marginal investor as rates are zero-bound. Central bank policy now is about providing liquidity, whereas growth needs to be stimulated through government policy.


Perpetual Equity Investment Company
Perpetual Asset Management (Australia)

The Perpetual Equity Investment Company Limited is an ASX listed investment company offering investors access to a portfolio of predominantly high quality Australian and global listed securities, selected by Perpetual Investment Management Limited.

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