The document discusses the changing correlations between equities and government bonds, highlighting the recent positive correlation between the German Dax and 10-year Bunds. It explores the implications of these changes for investors, noting that traditional strategies to reduce risk by adding government bonds to equity portfolios are becoming less effective. The document also examines the role of central banks and the use of negative interest-rate policies (NIRP) as a tool to escape the liquidity trap, while cautioning about the risks and uncertainties associated with relying on central banks' interventions.
doj/DataSet10/EFTA01388574.pdf
{"title":"The limits of monetary policy","key_people":["Mario Draghi"],"document_date":"March 2016","document_type":"other","key_locations":["Germany","Sweden","Denmark","Switzerland"],"key_organizations":["ECB","Bloomberg Finance L.P.","Deutsche Asset Management Investment GmbH"]}