By Darren Williams
COVID-19 has supplied the catalyst for a secular change in the role of central banks. Providing governments with ammunition to fight the virus is now the overriding goal, and this means keeping bond yields pinned close to zero for the foreseeable future.
The Changing Role of Central Banks
Throughout history, central banks have performed three main roles: providing low and stable inflation (price stability); safeguarding financial stability; and helping governments pay their bills (monetization). The importance of these different roles varies over time, and they often conflict. In the 30 years prior