Global QT
During the Covid crisis, after slashing interest rates near zero — or even below — many of them turned to large-scale asset purchases as a second powerful tool to help their economies.
That left them with giant bond portfolios, which they are now allowing to shrink.
The thing is, the one time that any big central bank has engaged in what’s known as quantitative tightening — the Fed in 2017-19 — it didn’t end well.
Powell acknowledged that US central bankers were blindsided when problems erupted in a vital money market that financial institutions rely on for short-term cash.
Jerome Jean Haegeli, a former Swiss central bank and IMF official, says that “global QT, should it continue well into 2025, is more likely than not to continue to trigger volatility spikes.”
Chris Anstey Bloomberg 22 augusti 2024
Mattias Svensson: Räntesänkningar får inte fart på tillväxt och produktivitet
https://englundmacro.blogspot.com/2024/08/rantesankningar-far-inte-fart-pa.html
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