Central bank policy intervention has dominated the investment landscape for the last eight years. Monetary policy intervention has certainly been helpful as it has steered the world economy from a global depression during the global financial crisis. With economic growth still stubbornly low in many regions, scepticism has grown about how effective monetary policy can be. The IMF forecasts world growth this year at 2.5%, which is the same as in 2015 and well short of the 3.7% average over the five years leading up to the global financial crisis. Quantitative easing, especially in the US, has been effective, but has come with consequences. For example through the encouragement of possible capital misallocation by favouring equities and property over cash and fixed interest, thus fuelling possible asset class bubbles.
Continue reading below:Newell Palmer - Monthly Economic Notes April 2016