World’s Biggest Central Banks Meet as Pressure Mounts to Do More
Global central banks remain under pressure to do more to support their economies through the coronavirus recession even after driving interest rates to record lows and pledging to spend trillions of dollars on asset purchases.
The U.S. Federal Reserve, Bank of Japan and European Central Bank, which together cover almost half of global output, will all convene meetings of policy makers this week after the pandemic-driven freezing of economies and turmoil in financial markets propelled them into action.
With governments this week set to confirm multi-year expansions ended in the U.S. and euro area in the first quarter, monetary policy makers may have to do more to limit the recession and speed the recovery. Among the options: extending the quantitative easing, helping ease credit to troubled businesses and committing to rock-bottom rates for longer.
“The extremity of the virus crisis is forcing central banks to push the limits of the possible,” said Tom Orlik, chief economist at Bloomberg Economics. “We expect the ECB to expand its fire fighting Pandemic Emergency Purchase Programme and the Bank of Japan to roll out more support for corporates. Ahead of the game in terms of the size and scope of stimulus, the Fed won’t add additional support, but will confirm it has space to do more.”
The April 28-29 policy meeting will be the first scheduled gathering since January, but officials have met multiple times since then.
36,188 in U.S.Most new cases today
-17% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23
-1.132 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23
-0.5% Global GDP Tracker (annualized), March