The European Central Bank, the Federal Reserve and other central banks in the developed world have used up monetary-policy tools available to them and are facing pressures to rein them in or at least not go further. The situation leaves central bankers with few options. "A new policy regime characterized by jawboning is now here," says Eric Green of TD Securities. "Policy is more constrained and more accommodation increasingly problematic in scope and complexity."
Central banks are forced to rely on words as main tool