Poll: Will Central Banks Reduce Their Involvement and Let Economies Operate on Their Own?
Since the financial crisis of 2008, central banks around the world have engaged in massive monetary stimulus and market interventions.
Over the past six years, global central bank balance sheets have approximately doubled to US$20 trillion — much of which has gone into buying government bonds, which has reduced interest rates. With the Federal Reserve now embarking on a cessation of quantitative easing, many fear that interest rates may rise and stanch economic growth.
Mohamed A. El-Erian will be exploring this topic at the CFA Institute Fixed-Income Management Conference (watch via Livestream).
Consequently, we asked CFA Institute Financial NewsBrief readers to comment on whether they believe central banks will be able to reduce their involvement in markets and let economies operate on their own.
Over the next few years, will central banks succeed in reducing their involvement in markets while enabling economies to flourish on their own?
An overwhelming majority (64%) indicated that central banks won’t be able to successfully extricate themselves from market interventions. In contrast, only 18% of respondents believe that central banks could manage the transition. And the remaining 18% said they don’t know.
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