Are Negative Rates Working Better Than Expected?

The video discusses the impact of negative interest rates, particularly in Japan and the US, and the unforeseen consequences of such policies. It highlights the challenges faced by pension funds and the distortion in risk-taking behavior. The European Central Bank's (ECB) actions, including potential further rate cuts and bond purchases, are examined in light of inflation expectations. The video also explores how economic uncertainty affects savings rates in the US and Europe. Finally, it questions the effectiveness of central bank interventions and the lack of fiscal policy support.

What is one of the main consequences of negative interest rates on pension funds?

• Increased pension fund surpluses

• Decreased pension fund deficits

• Increased pressure on pension fund deficits

• No impact on pension funds

What action is the ECB considering to address low inflation expectations?

• Cutting deposit rates

• Raising interest rates

• Increasing taxes

• Reducing bond purchases

Why might people save more in an economy with negative interest rates?

• Because of lower taxes

• Due to increased job security

• Because of a message of caution and uncertainty

• Due to higher wages

What is a significant concern regarding job creation in the US?

• Most jobs are in high-paid sectors

• Job creation is not keeping up with population growth

• A large percentage of jobs are in low-paid areas

• There is a surplus of high-paid jobs

What is a potential risk of central banks intervening in asset markets?

• It leads to stable asset prices

• It increases government debt

• It encourages excessive risk-taking by investors

• It reduces market liquidity

What percentage of the ETF market does the Bank of Japan own?

• 75%

• 50%

• 25%

• 10%

What is the G20's stance on fiscal intervention in the current economic climate?

• There is no coordinated view on fiscal intervention

• They have implemented fiscal intervention measures

• They support coordinated fiscal intervention

• They are against any fiscal intervention