So says Jeffrey Snider, here:
Yesterday the ECB relented on interest rates, reducing both its benchmark rate and its deposit rate (to 0.00%), bowing to the reality that Europe's hoped-for economic progress is now firmly in reverse. In addition to the ECB's action, the Bank of England increased its quantitative easing program by £50 billion in an effort to pull the UK out of its own sharp and persistent re-recession. Even the People's Bank of China got into the monetary act by reducing its benchmark bank lending rate (the 7-day repo rate on reserve payments, the RRR) and continuing its reverse repo operations.
These measures follow closely the intentional reductions in collateral acceptance parameters at the ECB and the Bank of England from just a few weeks ago. And just before that, the Federal Reserve pledged to keep its Operation Twist program going, extending the maturity of its US treasury portfolio still further. Most significant, however, may have been the first officially sanctioned instance of negative interest rates. The Danish central bank reduced the certificate of deposit rate to -0.20%, commenting that this was a "good problem" to have. In doing so, the Danes have confirmed that money continues to flow out of the European periphery and into the so-called "core" that apparently includes Denmark.
Central banks continue to employ "monetary stimulus" in unconventional ways, through unprecedented means and taken to unbelievable levels. And the arc of re-recession continues and spreads unimpeded.
