In Japan, there is even talk of ‘helicopter money’, while in the US, as a result of the Brexit shock a July hike is not on the table, and the market implied probability of a Fed rate hike in 2016 has declined from about 50% on the eve of the UK vote to roughly 10% today.
As a result, the 4 major central banks’ divergent monetary paths, which have been the dominant theme in the financial markets since the start of the year, seem to be off the table for now. Indeed, at present, there is a shift from “monetary policy divergence” to “financial markets divergence” through stockbond markets.