After today’s uneventful Fed announcement, all eyes turn to the BOJ where many anticipate some form of “helicopter money” is about to be unveiled in Japan by the world’s most experimental central bank.
However, as Nomura’s Richard Koo warns, central banks may get much more than they bargained for, because helicopter money “probably marks the end of the road for believers in the omnipotence of monetary policy who have continued to press for further accommodation in the midst of a balance sheet recession, when such policies simply cannot work.”