Why will interest rates remain low, and will they not rise throughout the year?
Because the big central banks are giving a reverse helm to that of the financial "normalization" (raising of rates, neutralization of the quantitative expansion), which was their recent mantra. Why do they pass from the rigorism sought to maintain laxity?
The first to do so was the Federal Reserve. In 2018 the rates went up four times to the fan 2.25% -2.50%. But in January he opted suddenly for "patience" – the motto now – cooling the expectation of another four in 2019. And studying the cessation of the reduction of assets purchased.
Did he obey the change to the intrusive pressure on his independence under President Trump? He said he was "not happy" with appointing Jerome Powell to the Fed. And he called it "crazy" for not lowering rates in a buoyant situation, which hurt his mid-term electoral plans.
But Powell resisted the stake. He only changed his strategy at the end of January. What had happened? A collapse of the stock market after the last rise in December, and the new IMF forecasts on the world economy, more sad. It was not a time of monetary rigor that caused the recession feared by some.
The Fed highlighted various uncertainties: the trade war, the slowdown in the eurozone and China, a Brexit a la brava … In the end almost everything is reduced to the commercial war, concause of the bad aspect of the situation between the most sensitive to that war ( Germany and China). Thus, the good news of rate maintenance comes from the bad of the global economic downturn, and this is Trump's protectionist madness.
The ECB, with some delay (just beginning its "normalization"), shared – "patience!" – the bias, to verify the asthenic growth of the eurozone at the end of 2018 and a downward inflection of inflation. "The key question is whether this situation is temporary, especially in Germany, or a permanent change," questioned the French governor, François Villeroy (EL PAÍS, February 17). Good part of the answer Trump has.