Representatives from the Chinese side say they think it likely that Chinese President Xi Jinping will attend the G-20 meeting later this month. But in order to reach a trade...China Economyread more
Software engineers straight out of college often make six-figure salaries, not counting equity compensation.Technologyread more
Wall Street, though, is clamoring for a rate cut, with an 85% chance of a move in July and a 61% probability of three reductions by year's end.The Fedread more
A company spokesperson said the outage was the result of a "an internal technology issue" and was not security related.Retailread more
The flattening of the yield curve is exuding a bad omen for the stock market if history is any guide.Marketsread more
Using MIT's living wage calculator, CNBC Make It mapped out the minimum amount a single parent must earn to meet their basic needs without relying on outside help in every...Earnread more
Hong Kong Chief Executive Carrie Lam announced at a press conference on Saturday that a contentious bill to allow extraditions to mainland China has been put on hold.China Politicsread more
Stratolaunch, the world's largest airplane, which flew once, is up for sale, sources familiar told CNBC.Investing in Spaceread more
Transparency is key… or is it? With the first-ever non-transparent, actively managed exchange-traded fund receiving approval from the SEC, "ETF Edge" goes straight to the...ETF Edgeread more
Mired in a crisis over its best-selling 737 Max plane, Boeing could hand the spotlight over to its rival Airbus at the Paris Air Show.Airlinesread more
A new update to the Apple Watch called watchOS 6 will notify you if the environment you're in is too loud and could damage your hearing.Technologyread more
Markets are currently riding on the wave of uncertainty and speculation over whether the world's central banks will continue to pump in more and more cash into the economy though bond-buying programs known as quantitative easing (QE). But as we go deeper into the world of easy money from central banks, there are other areas of the economy that could see a knock-on effect.
Alberto Gallo, head of macro strategies and manager of the Algebris Macro Credit Fund, describes this paradox as "QE infinity," whereby low rates and seemingly endless rounds of bond-buying programs encourage cheap borrowing, and investment in financial markets -- but not in the real economy.
"The problem is rising debt and monetary easing comes with many collateral effects. One is the distortion of asset prices, leading to asset bubbles," Gallo explained on his website.
"Asset price distortion also has a ripple effect on wealth distribution, increasing inequality by benefitting the already-wealthy who are more likely to hold financial assets. Over time, low rates and QE can also encourage misallocation of resources to leverage-sensitive sectors, including real estate and construction."
Gallo further explained that for the global economy to exit this QE infinity trap, government action and reforms to improve productivity are needed.
"But many governments are reluctant to accept the need for these measures, often instead implementing policies that win votes but compound the distortions of easy monetary policy e.g. housing affordability programmes, mortgage subsidies."
Without an adequate fiscal response from governments, growing imbalances make it harder to withdraw stimulus, warned Gallo.
"This is the paradox of current monetary policy: On one hand, it is the best possible response available to central bankers. On the other, it has long-term collateral effects which need to be confronted eventually."
Central banks have seen themselves come up with new ways of stimulating the economy ever since the world plunged into financial crisis in September 2008. Data from JPMorgan shows that the top 50 central banks around the world have cut rates 672 times between them since the collapse of Lehman Brothers, a figure that translates to an average of one interest rate cut every three trading days. This has also been combined with $24 trillion worth of asset purchases.
This raises a big question: Will the global economy ever exit QE Infinity?
An increasing number of analysts and policymakers have shown concern over the state of the global economy due to a continuous state of unorthodox monetary policy.
Earlier this year, the outgoing Indian central bank governor Raghuram Rajan expressed concerns over infinite quantitative easing and referred to it as an "unstable situation."
Speaking to Bloomberg TV India, he said either the world economy needed stronger growth or recognized the limits of monetary policy have been exhausted and slowly go back to normalcy across the world.
But how much further can the banks go now? Analysts have started to worry whether central banks might soon run out of options and look at fiscal plans for support. But some analysts say this is already happening in Europe.
"At the macroeconomic level, interestingly monetary policy is becoming more and more associated with fiscal easing," Vincent Juvyns, Global Market Strategist, JP Morgan Asset Management told CNBC via email.
He cited the example of the European Commission that continues to implement its infrastructure plan, which reached the 100 billion euro ($112.8 billion) mark in June and will be extended. "The government austerity period is also clearly over in most member states and we can see that in aggregate, European governments are again spending more."
However, it is not enough as many analysts claim especially as the global economy is slowly getting sucked into the world of ultra-low interest rates and infinite amounts of QE. While this has helped stimulate growth, it has also created a tough trading environment with all-time low yields for investors.
"QEs have distorted the fixed income market. By continuously pushing asset prices higher and yields lower, economies and markets have become increasingly reliant on these accommodative measures," Morgane DelleDone – Associate Director, Fixed Income Strategist at ETF Securities told CNBC via email.
Follow CNBC International on and Facebook.