There’s a narrative going around that central banks are losing their influence. The market might be rejecting some of their policies, like NIRP in Japan, but central banks are as powerful as they ever were and that’s unlikely to change anytime soon. There’s one alpha-central bank, the Fed, whose influence is far greater than all the others. There may come a day when that’s not the case, but for now “Rest of World” central banks are left managing monetary policy in the Fed’s wake. All of these central banks want to avoid deflation because it increases their real debt burden, but their strategies for avoiding a decline in prices varies widely. In part 2 we look at Switzerland:
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