by Adrian Ash
A deflation scare has hit central banks worldwide this year. All but 13 of 77 policy meetings since January 1 have held or cut rates. Japan has now followed the European Central Bank, Switzerland and Sweden into what many people find the frankly insane policy of paying negative rates to commercial banks, and charging them for holding excess reserves on deposit.
Yes, the Federal Reserve finally raised its key rate from 0% just before Christmas, but the futures market now sees zero chance of the Fed raising for a second time at next week’s meeting. Only 3% of economists polled by the Wall Street Journal think that’s likely, down from almost 1-in-10 a month ago.