Podcasts Government Asia's Developing Future Central banks are losing power to influence markets as interest rates hit zero

Central banks are losing power to influence markets as interest rates hit zero

Published: March 28, 2018, 8:45 a.m.

b'Central banks are running out of wiggle room, having lowered interest rates, in some cases to zero or negative, and are losing influence over markets becoming accustomed to a low-rate regime.\\n\\n\\u201cForward guidance\\u201d is losing traction.\\n\\nNarayana Kocherlakota, former president of the Minneapolis Federal Reserve Bank, says central banks can try to guide public perception by hinting at their intentions, a practice known as forward guidance in banking circles, and he used to think that once interest rates were at the lowest they could go\\u2014a position called the lower bound\\u2014forward guidance was a good tool to use.\\n\\nBut Kocherlakota, now professor of economics at the University of Rochester, told the annual conference of the Asian Development Bank Institute he has changed his mind.\\n\\nRead the transcript\\nhttps://bit.ly/2pKGfQI\\n\\nAbout the speaker\\nNarayana Kocherlakota is a now professor of economics at the University of Rochester.\\n\\nWatch the whole presentation\\nhttps://youtu.be/BKnJS37KbGE?t=2420\\n\\nRead the book\\nhttps://www.adb.org/publications/implications-ultra-low-and-negative-interest-rates-asia\\n\\nKnow more about ADBI\\u2019s work on finance\\nhttps://bit.ly/2DYo5zi\\nhttps://bit.ly/2GykwFb'