America is not close to facing the chronic forces characteristic of Japan’s markets the past few decades, JPMorgan notes. One of the items JPMorgan cites is The Fed’s ability to hike rates following the financial crisis. This built confidence that the U.S. didn’t need to live in an indefinite low-rate environment.
“Taking policy rates to zero with strong forward guidance is only a necessary condition in the road to Japanization of the yield curve,” JPMorgan strategists wrote in a note to clients, according to the article. The note further indicated that the U.S. “is furthest away as the market attributes maximum credibility to the Fed in its reflationary exercise.”