Policy designed to spur spending may be prompting more savings
A WSJ front page article today looks at the unintended consequences of negative rates in the eurozone, Japan and other places with below-zero rates.
"Recent economic data show consumers are saving more in Germany and Japan, and in Denmark, Switzerland and Sweden, three non-eurozone countries with negative rates, savings are at their highest since 1995, the year the Organization for Economic Cooperation and Development started collecting data on those countries," the WSJ reports.
Some argue that correlation doesn't necessarily mean causation. Those same countries are aging and inflation is low. Others say it's too soon to judge.
What it may come down to is confidence. If consumers view negative rates as a sign of indefinite stagnation rather than a temporary boost that will spur growth and inflation; then they will set more aside and take less risk.
Then again, it's tough to have confidence in the characters who are running global central banks.
