PR Newswire
NEW YORK, May 9, 2016
NEW YORK, May 9, 2016 /PRNewswire/ -- J.P. Morgan Asset Management today released a new Investment Insights paper that looks beyond the near-term forecast of the Federal Reserve's next rate hike or the European Central Bank's next round of asset purchases to explore what developed market monetary policy could look like in future business cycles, how central banks might deploy quantitative easing, negative interest rates or 'helicopter money,' and what this implies for multi-asset investors and global markets. The paper, "The Future of Monetary Policy," examines the future of novel central bank policy approaches to realizing their mandates of price stability and full employment. Key findings include:
"All of these developments are a mixed blessing for multi-asset investors," said Ben Mandel, Global Strategist, J.P. Morgan Asset Management, "On one hand, central banks are finding ever more diverse and creative solutions to achieve their mandates. On the other, it suggests that the warning bell coming from the Treasury yield curve will be less informative than it used to be about the most worrisome outcomes, when the economy tilts into recession. In our view, variations in quantitative easing among central banks will continue to define the degree of monetary policy divergence in the coming years."
"The entire spectrum of conventional and unconventional policies has shifted in the past few years, blurring the lines between fiscal and monetary policy and raising questions about central bank independence," continued Stephanie Flanders, EMEA Chief Market Strategist, J.P. Morgan Asset Management. "Arguably, central bank-financed fiscal stimulus—helicopter money—would be the logical endpoint of this progression. If another downturn threatens while policy rates are still close to zero and central bank balance sheets are still enlarged, it is a reasonable assumption that at least one central bank abandons the pretense and helicopter money will complete its move from the unthinkable to the merely unconventional."
"It is fair to say that current policies are less 'unconventional' than they used to be," concluded Thushka Maharaj, Global Strategist, J.P. Morgan Asset Management. "The drawback, however, remains that the same attributes that make today's policies compelling could also ultimately spell out their limits in the long term."
Please view the full J.P. Morgan Asset Management Investment Insights paper "The Future of Monetary Policy" by Global Strategists Benjamin Mandel, Thushka Maharaj, Michael Albrecht and EMEA Chief Market Strategist Stephanie Flanders here.
About J.P. Morgan Asset Management
J.P. Morgan Asset Management, with assets under management of $1.7 trillion, is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high net worth individuals in every major market throughout the world. J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. JPMorgan Chase & Co. (NYSE: JPM), the parent company of J.P. Morgan Asset Management, is a leading global asset management firm with assets of approximately $2.4 trillion and operations in more than 60 countries. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. and its affiliates worldwide.
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SOURCE J.P. Morgan Asset Management
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