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As interest rates have already reached a floor, they cannot fall any further: the shock of the coronavirus crisis cannot be cushioned by a fall in interest rates, according to Natixis.

Key quotes

“If interest rates – unlike what happened after the subprime crisis – cannot fall, the only solution to respond to the crisis is the one that has actually been used: a very expansionary fiscal policy with full monetisation of fiscal deficits.” 

“Fiscal policy is necessarily more expansionary than after the subprime crisis, since interest rates cannot fall any further this time around. Monetisation prevents the crowding out effects and the rise in long-term interest rates that would result from the huge fiscal deficit (and the increase in corporate debt) if central banks had not bought the issued bonds.”