Now that the Federal Reserve is raising interest rates, other leading global central banks may find that their infatuation with extraordinary measures has cooled.
Even before the Fed took its decision this month to increase key rates by 25 basis points, other central banks were growing tentative in their commitments to lowering rates and buying up assets.
The European Central Bank (ECB) in early December underwhelmed markets and gave evidence of internal division when it cut rates further into negative territory by just 10 basis points and extended rather than expanded its program of buying bonds.
And while the Bank of Japan (BOJ) made adjustments to its bond-buying program after the Fed move last week, it did so after surprising investors on Oct. 30 by not unleashing new and larger efforts.
"Developed central banks have reached a point of diminishing returns to their unconventional policies," Stephen Jen of hedge fund firm SLJ Macro Partners wrote in a note to clients.
Almost since the Fed began its blitz of market-supporting measures in the depths of the recession in 2008, bad news has had a peculiar attraction to investors, carrying with it the promise of larger, and more radical, support from central banks. That was intended to support financial asset prices, and so it has. As that support is unwound, the opposite effect, a weakening of asset prices, can be expected.
That's especially true if good news in the U.S. allows the Fed to carry on hiking rates while bad or mixed news elsewhere fails to elicit new central bank support from the ECB or BOJ.
Part of the reasoning behind quantitative easing (QE) was to create conditions in which companies, seeing new markets due to a falling yen and cheap financing, decide to invest in new output.
Had it happened that way it might have lifted output and wages. Japanese companies instead, partly because they understand demographics, decided to allow profit margins to fatten and have been reluctant to share out profits as wage gains.
Perhaps that's why the Nikkei has sold off on the news. Take this line of thinking to its logical extension and you might conclude that QE acts mostly as a subsidy to corporations and the wealthier people who own their shares.
Let's hope 2016 is the year the data supports central banks tightening or standing pat, because the evidence for more of the same is not strong.
James Saft is a Reuters columnist.