Three Challenged Central Banks

Europe, Japan, and China all face economic challenges that monetary policy could help address, but none of their central banks seems ready to deploy the monetary firepower at their disposal, Melissa and Eric report. In Europe, the ECB’s recent rate cut was too small to move the economic revival needle, and the ECB chief wants fiscal policymakers to step up. In Japan, the BOJ is in a watching-and-waiting mode before hiking rates again after its first rate hike touched off a carry-trade ruckus. In China, the government seems unlikely to resort to aggressive rate cutting to stimulate the consumer sector, pinning its hopes instead on fiscal policy and central bank asset purchases.