This one strikes closest to home. Also making me think the most about what the heck is going on. Where are we in the economy? Are we in a bubble? The kind that’s going to pop or is this the New Normal.
- More Forward Guidance
- More Quantitative Easing – Feds buy more Bonds. It has been effective in the past, but the Feds already have $4.5 Trillion on their balance sheets.
- Negative Interest Rates – pushing rates below zero effectively means people will have to pay banks to hold onto their money. Creating incentive for people to spend/invest it instead. This has worked in parts of Europe with no downsides, but US could be different and negative rates will hurt small local banks (that depend on deposits)