Pedestrians walk past a stock indicator board for the Tokyo Stock Exchange. Photo: Behrouz Mehri/AFP/Getty Images

The market may be losing faith in central banks' ability to fire up financial markets, as further stimulus measures are expected to have less of an impact on the real economy. U.S. stocks have had their best start to a year since 1991 on the back of the Fed's rate hike reversal, but have gone ice cold in March.

Why it matters: This is similar to what happened last year when stocks skied until September and then skidded downward as economic reports from Italy, Switzerland, Germany, Japan and China all started to spell bad news.

Details: Currently the U.S. is expecting less than 1% economic growth in the first quarter, money managers doubt the eurozone can even hit 1% growth for the year and Canada and Japan may be looking at recessions.

  • American companies could also be running out of will and ammunition for stock buybacks, which drive down PE ratios and inflate prices, as lawmakers look set to target the practice.

What they're saying: This is all setting the stage for the developed world to "be Japanized," Zhiwei Ren, managing director and portfolio manager at Penn Mutual, tells Axios. Japan has been stimulating its economy with asset purchases, government spending and negative interest rates for years and still can't generate lasting inflation pressure.

Europe and the U.S. are a few steps behind, but we're all moving that direction. If you look at the recovery, we're into it for 10 years and GDP is 3% and we’re still not seeing inflation, which is a big issue because for an economy with a lot of debt you want some inflation every year.
What the ECB has already done with quantitative easing and negative rates is all they could have done. The purpose of TLTROs is to push more credit into market. But the issue isn’t on the supply side, it’s a lack of demand.
"When GDP is growing below potential that means there's not enough demand. So, no matter how much credit you provide if nobody comes to borrow that's a liquidity trap. The ECB is in a liquidity trap. They can pump as much as they want but liquidity isn't flowing into the real economy.

Go deeper: Almost everything going on in the world is bad for the economy

Go deeper

Bryan Walsh, author of Future
1 hour ago - Health

Rockefeller Foundation commits $1 billion for COVID-19 recovery

A health worker performs a COVID-19 test in New Delhi. Photo: Raj K Raj/Hindustan Times via Getty Images

The Rockefeller Foundation announced on Monday that it will allocate $1 billion over the next three years to address the pandemic and its aftermath.

Why it matters: The mishandled pandemic and the effects of climate change threaten to reverse global progress and push more than 100 million people into poverty around the world. Governments and big NGOs need to ensure that the COVID-19 recovery reaches everyone who needs it.

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Politics: Ex-FDA chief: Pence campaigning after COVID exposure puts others at risk — Mark Meadows: "We are not going to control the pandemic"
  2. Health: 13 states set single-day coronavirus case records last week — U.S. reports over 80,000 new cases for second consecutive day.
  3. World: Italy tightens restrictions Spain declares new state of emergency.
  4. Media: Fox News president and several hosts advised to quarantine after possible COVID-19 exposure

Fox News president and several hosts advised to quarantine in COVID-19 precaution

A political display is posted on the outside of the Fox News headquarters on 6th Avenue in New York City in July. Photo: Timothy A. Clary/AFP via Getty Images

Fox News President Jay Wallace and anchors Bret Baier and Martha MacCallum are among those recommended to get tested and quarantine after possible exposure to COVID-19, the New York Times first reported Sunday night.

The big picture: The Fox News contingent, which also included "The Five" show hosts Juan Williams and Dana Perino, were on a charter flight from Nashville to New York following Thursday's presidential debate with a person who later tested positive for the coronavirus.