Monetary Policy Is Out Of Bullets, Warns BIS

While the IMF is pushing for the Federal Reserve to delay its first rate hike until 2016, the Bank for International Settlements (BIS) is worried that there is far too much financial elasticity in the global economy and that monetary policy is out of answers if another recession hits developed markets soon. “The more one stretches an elastic band, the more violently it snaps back. Restoring more normal conditions will also be essential for facing the next recession, which will no doubt materialise at some point. Of what use is a gun with no bullets left?” says the report. BIS…