PIMCO Dumping Bonds, Fears “Helicopter Money”
in response to
by
posted on
Aug 22, 2019 01:54AM
August 20, 2019
“We think it’s premature to declare inflation to be dead...”
“We could still see more unorthodox policies, like ‘helicopter money’.”
PIMCO's words (and actions, we presume), echo a report from BlackRock, co-authored by Philipp Hildebrand, Stanley Fischer and Jean Boivin, pointing out that central banks have limited firepower left in their monetary armory, and that fiscal policy is constrained by still-high debt levels. The trio concluded that “unprecedented policies will be needed to respond to the next economic downturn”. The report added:
“Without a clear framework in place, policymakers will inevitably find themselves blurring the boundaries between fiscal and monetary policies... This threatens the hard-won credibility of policy institutions and could open the door to uncontrolled fiscal spending.”