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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.

What's happening: 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.

  • As a result, today the central bank policy toolkit is looking quite barren and market watchers are skeptical they will be able to make much difference in the event of a downturn.

"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]."

  • In spite of the elevated stimulus already undertaken by China, the U.S. and Europe in the form of government spending and monetary easing and unprecedented share buybacks by American companies, global growth is still slowing significantly, Booth says. "It's no wonder policymakers are making a coordinated effort to ease."

"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."

Go deeper: Fed gives first sign it may cut interest rates

Go deeper

Felix Salmon, author of Capital
32 mins ago - Economy & Business

How anti-greed backlash killed the European Super League

Photo: David Cliff/Anadolu Agency via Getty Images

The 48-hour rise and fall of the European Super League is the perfect encapsulation of how anti-greed sentiment has changed the rules of capitalism.

Why it matters: The highly-complex structures of capitalism are built from the mostly base motivations of individuals chasing money. That's been condemned and celebrated in equal measure — but has also largely been accepted.

Senate Republicans unveil $568 billion infrastructure counterproposal

Sens. John Barasso and Shelley Moore Capito. Photo: Caroline Brehman/CQ Roll Call/Bloomberg via Getty Images

Senate Republicans formally rolled out the framework for their $568 billion counterproposal to President Biden's $2.5 trillion infrastructure plan on Thursday.

Why it matters: The package is far narrower than anything congressional Democrats or the White House would agree to, but it serves as a marker for what Republicans want out of a potential bipartisan deal.

House passes bill that would make D.C. the 51st state

House Speaker Nancy Pelosi and Washington, D.C. Mayor Muriel Bowser. Photo: Alex Wong/Getty Images

The House of Representatives voted 216-208 on Thursday to pass a bill that would grant statehood to Washington, D.C.

The big picture: It's the second year in a row that the Democratic-controlled House has voted to recognize D.C. as the 51st state. The bill now heads to a divided Senate, where it faces little chance of reaching the 60 votes necessary to send to President Biden's desk.