The global economy's road to "Japanization"

Two Japanese men walk by red neon boards displaying Japanese stocks.
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.

ECB announces plans to stimulate slowing economy

ECB President Mario Draghi. Photo: Frederick Florin/AFP/Getty Images

The European Central Bank is launching measures to help revitalize the eurozone's slumping economy, including offering cheap long-term loans for banks and pushing its plans to raise interest rates farther out than it previously indicated.

Why it matters: Central banks around the world have turned dovish, but as the Wall Street Journal points out, the ECB is the first major bank to actually ease monetary policy — just a few months after it ended its multi-trillion dollar bond-buying program.

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