The constraints of the zero lower bound means developed economies may be confronted with the prospect of a future of chronically weak demand and slow economic growth
A small bump in the road has a negligible impact when taken at slow speed. The story is different when one is speeding down the highway. The same applies in financial markets.
The ECB’s messages are clear: inflation will stay low and below its policy objective for quite some time; policy rates will stay low for years to come; if need be the ECB can do more but let’s see first how this works.
Comforting economic news and low levels of the ‘fear gauges’ in markets reflect a peaceful environment, yet investors feel unease. This is healthy and should prolong the bull market.
Charles Alberti, Investment Specialist at THEAM, and Anne Poirrier-Hamon, Head of Product Strategy at BNP Paribas Asset Management, respond to Perspectives’ questions regarding the cutting-edge target date strategy designed to provide investors with upside potential as well as formal protection by the BNP Paribas Group.
The European central bank’s ability and willingness to take, if economic conditions require, non-conventional monetary policy measures has provoked reactions in senior ECB officials.