Economists warn central bank and government policy will not calm pandemic sell-off

Will QE and helicopter money do more harm than good?

Orthodox monetary and fiscal policy will not be enough to reassure investors and calm market volatility amid the ongoing fallout of the coronavirus pandemic, economists have warned, while even radical policies such as helicopter money could fail to end the mass sell-off.

Over the past two weeks central banks have rushed to slash interest rates to record lows, and boost quantitative easing (QE) and liquidity measures, but equities and other assets across the world have continued to plummet in value. The US Federal Reserve's sudden move to cut interest rates to between 0% and 0.25% on 15 March may have shocked markets into reacting more strongly, with losses across nearly every asset class bar governments bonds, which barely moved in the days that followed. Market Movers Blog: Global economy will take "years" to recover from coronavirus shock - OECD ...