FAST FIVE: "Going Nuclear"? Nomura Explains What More Central Banks Can Do

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Money transfers from central banks are a form of fiscal policy.

US fiscal authorities announced plans to provide means tested rebates directly to qualifying individuals, so it's not obvious that central banks need to provide that sort of support to the economy.

In effect the Fed may implement a form of yield curve control (YCC) as the economy transitions from extreme contraction to recovery with very high fiscal deficits.

It may not be long before the government needs to take much bolder measures.

After all, in the statement accompanying its decision to add a further €750bn of purchases to the mix last week the ECB said that “The Governing Council is fully prepared to increase the size of its asset purchase programmes and adjust their composition, by as much as necessary and for as long as needed”.

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