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Bank of Japan governor Haruhiko Kuroda at the G20 finance ministers and central bank governors meeting in Japan. Photo: Eugene Hoshiko/AFP/Getty Images
After pulling back from what was expected to be the year for global central bank policy tightening in January, policymakers are now giving markets a clear signal that they intend to start cutting interest rates, pouring stimulus on the economy. But analysts are skeptical the same song and dance will work this time.
The Fed has signaled it will likely cut this year, while central bankers in Australia, New Zealand and India already have cut rates to historic lows with markets expecting more.
The intrigue: In places like the eurozone and Japan, where interest rates are already below 0%, central bank heads may have to get creative in order to stimulate their slumping economies.
What they're saying:
ECB vice president Luis de Guindos, in remarks from Madrid: "We remain alert in the wake of mounting global uncertainties. The Governing Council is, therefore, determined to act in case of adverse contingencies and also stands ready to adjust all of its instruments."
BOJ governor Haruhiko Kuroda told Bloomberg: "If the momentum to our 2% inflation target is lost, then of course, the Bank of Japan will swiftly respond by changing our policy."
What it means: During the financial crisis central bankers used the extraordinary policies of QE to offset a potential depression scenario.
"Stimulus looks like chimera," Danielle DiMartino Booth, CEO of research firm Quill Intelligence, tells Axios in an email. "Stimulus has hit a wall of diminishing returns as a consequence of policymakers never having the courage to normalize [interest rates]."
"Kuroda and de Guindos are whistling past the graveyard," Joseph Trevisani, senior analyst at FXStreet, tells Axios. "When a recession comes they may buy bonds and push rates further into negative territory, largely because they are supposed to do something, but it will have very limited effect on their economies."
In the midst of the still-unsettled Brexit decision the Bank of England hasn't made as many headlines as its global counterparts, but remains a major part of the quantitative easing story.
In March, The Guardian's economics correspondent Richard Partington looked at whether or not QE could be called a success in the country 10 years after it began.
The big picture: "The measures were designed for an emergency, yet still remain in place today, with the proceeds from any maturing bonds immediately used to fund more QE purchases. However, the fact that it has not been stopped – and that rates remain close to zero – indicate that the policy has not worked emphatically.
The bottom line: "The real problem we have with the economy is that it hasn't turned out to be an emergency measure, it's turned out to be the status quo."
The U.S. quits rate has remained unchanged for the longest period on record. For 10 straight months, from June 2018 to April, the quit rate has been 2.3%.
The big picture: The high quit rate — the measure of Americans who voluntarily leave their jobs as a percentage of total employment — is an indicator of a strong economy, and it's been holding at a 15-year high and the second highest rate since the government began tracking the data in 2000.
The Canadian economy added 27,700 jobs in May, bringing the year-over-year job gains to 453,100, and pushing the unemployment rate to 5.4%, the lowest level since 1976.
But, but, but: Canada's economy grew at an annualized pace of just 0.4% in the first quarter, following 0.3% growth in the fourth quarter of 2018, giving the country its weakest back-to-back quarters of growth since 2015.
On the bright side: The Bank of Canada forecasts a rebound in the second half of the year with Canada’s GDP expected to grow by 1.2% this year, wages are rising and consumers are growing less pessimistic about the economy.
Marc Benioff's San Francisco-based Salesforce on Monday announced a more than $15 billion all-stock purchase of data visualization software company Tableau.
What they're saying: "With Tableau, Seattle will become our second headquarters of Salesforce. That’s going to be our HQ2, if you will," Benioff said on a conference call announcing the deal.
TechCrunch reports: "Tableau has about 86,000 business customers, including Charles Schwab, Verizon ..., Schneider Electric, Southwest and Netflix. Salesforce said Tableau will operate independently and under its own brand post-acquisition. It will also remain headquartered in Seattle, Wash., headed by CEO Adam Selipsky along with others on the current leadership team."
Why it matters: Much like the actual rich, the geographically rich keep getting richer in America. Seattle, already home to Microsoft and a bevy of growing tech businesses, will now be a second home to Salesforce.
The Trump administration had stoked investor hopes this year that the government sponsored enterprises, mortgage giants Fannie Mae and Freddie Mac (not their real names), could be released from conservatorship soon in a listing potentially valued at $100 billion.
But Treasury Secretary Steven Mnuchin recently made it clear that won't happen without a major overhaul of the nation's housing finance system and action by Congress.
The market reaction: Fannie Mae stock fell 9.5% Monday, while shares of Freddie Mac dropped 9.75%.