Are central banks around the world gearing up for another round of monetary easing?
The Bank of Japan surprised markets on Tuesday by reverting to zero interest rates in a bid to prop up an ailing economic recovery. The central bank also set up, as a temporary measure, a 5 trillion yen ($60 billion) fund to buy assets ranging from government bonds and short-term government securities to commercial paper and corporate bonds.
Investors now expect the U.S. Federal Reserve to also embark on some form of quantitative easing, after Chairman Ben Bernanke hinted in late August at a whatever-it-takes approach to keeping the U.S. economy afloat.
There are also calls within the Bank of England for further easing, although the bank has kept markets guessing on whether it will indeed do so.
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