[When] the market is trying to get to terms with, first, lower global growth, particularly out of emerging markets and China. And, second, the market is worried the central banks have run out of ammunition. So put these two things together, and then investors are repricing the market lower.
Mohamed El-ErianIf you happen to be the only one with negative interest rates, you also weaken your currency, which means you make your exports more competitive.
Mohamed El-ErianHow long can interest rates stay negative? Think about this. Not only are you lending your money to governments, but you're paying them interest for the privilege of doing so.
Mohamed El-ErianThe theory is that if you take interest rates negative, people are going to say, "That's a silly game! I'm not going to lend my money to governments who want me to pay them. I am going to go into the stock market where I can get positive returns!"
Mohamed El-Erian[When] the market is trying to get to terms with, first, lower global growth, particularly out of emerging markets and China. And, second, the market is worried the central banks have run out of ammunition. So put these two things together, and then investors are repricing the market lower.
Mohamed El-Erian