Since the 2007-08 financial crisis, big central banks have carried out asset-purchase programmes to stimulate economic growth and reduce borrowing costs. Government-bond yields have fallen as a result. More than $9trn of global sovereign bonds were trading at negative rates last summer, according to the OECD. The Bank of Japan now holds over 40% of the country’s government debt. Monetary policy has diverged between America and Europe. Whereas the Federal Reserve started to reduce the size of its balance-sheet last year, the European Central Bank intends to continue asset purchases until inflation is close to the target of just under 2%.
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