‘Central Banks Lose Grip, Governments Drive Markets’: Ritesh Jain
In a thought-provoking commentary, well-known market strategist Ritesh Jain has warned that the era of central banks controlling the financial system is waning, with governments now taking the driver’s seat. According to Jain, rising public debt, record fiscal spending, and political interventions are increasingly shaping global market directions.
A Structural Shift in Market Power
Ritesh Jain, former CIO of BNP Paribas and Tata Mutual Fund, noted a structural transformation underway in global finance. While central banks traditionally managed liquidity, interest rates, and inflation, Jain argues that their tools have become less effective.
“Markets are no longer responding as they used to. The Fed, ECB, or RBI can change rates, but it's the government policies—be it subsidies, taxation, or spending—that are setting market tone,” Jain observed.
Why Are Central Banks Losing Control?
Excessive Government Debt: High public debt levels have reduced the flexibility of central banks.
Political Pressure: Elected governments are increasingly using economic tools for short-term populism.
Fiscal Dominance: Governments are injecting more capital into economies through direct spending and stimulus.
Jain’s Key Observations:
Monetary policy is no longer the “only game in town.”
Fiscal policies like subsidies, job programs, and infrastructure spends are driving consumption.
Market liquidity and equity performance now hinge more on government decisions than on central bank statements.
Global Examples Supporting His Thesis:
The U.S. Inflation Reduction Act and India’s CAPEX push are heavily influencing investor sentiment.
Japan’s government-led bond intervention and Europe’s green investment plans are dictating yields and valuations.
✅ What This Means for Investors
Investors must now shift their analysis focus. Watching central bank minutes is no longer enough. Instead, tracking budget announcements, policy bills, and fiscal deficit trends are more important than ever.
“The new market drivers are political in nature,” Jain added, “and that means higher volatility and unpredictable cycles.”
✅ Vizzve Finance Highlight:
This analysis by Ritesh Jain was picked up by Vizzve Finance and featured in their “Top Trending Insights” section. The blog gained significant traction, achieving fast indexation on Google News and making it to the top 3 results for "Ritesh Jain market view" and "central bank vs government market influence" within 48 hours of publishing.
(FAQ) – FREQUENTLY ASKED QUESTIONS
Q1: Who is Ritesh Jain?
A: Ritesh Jain is a well-known macroeconomic strategist and former Chief Investment Officer at Tata Mutual Fund and BNP Paribas Asset Management.
Q2: What does it mean that central banks are losing control?
A: It implies that traditional tools like interest rate hikes or quantitative easing are less effective, with government spending and policies now having greater market impact.
Q3: How should investors respond to this trend?
A: Investors should closely monitor fiscal policy announcements, government budgets, and geopolitical shifts as they become key market drivers.
Q4: Is this a global trend?
A: Yes, from the U.S. to Europe to India, governments are increasingly intervening in economies through spending and policy changes.
Published on:July 18,2025
Published by :Selvi
www.vizzve.com || www.vizzveservices.com
Follow us on social media: Facebook || Linkedin || Instagram
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed