Central banks are trapped.

“Five years into the negative rate experiment, and a decade on in radical monetary improvisation, the central bankers are looking for a way back to normalcy. Not finding it, they are casting around for new ways to control what they seem unable to understand.”

“The unintended consequences of public policies are usually more consequential than the ones the policy makers had banked on. Lest the central bankers forget, interest rates are prices, not policy levers. And as prices, they set investment hurdle rates and measure credit risk. Artificially low rates therefore call forth artificial investments.”