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ECB Reiterates QE Infinity At Mario Draghi’s Final Meeting
As expected, the ECB kept policy unchanged at the last meeting of Mario Draghi's tenure.
Today's "hold" comes after the central bank unveiled a new stimulus package in September, complete with a rate cut, tiering, new forward guidance and, of course, more QE.
September's meeting was, by all accounts, the most contentious of Draghi's eight year term. Minutes from the proceedings betrayed a house divided, especially on the relative merits of relaunching net asset purchases.
Read more: ‘QE Inf
I hate to discount the machinations of the ECB, but what I’m really concerned about is the shift yesterday 10/23 of our FRB’s “non-QE” doubling of the repo buybacks to $120 billion/day. https://www.newyorkfed.org/markets/opolicy/operating_policy_191023. What’s the message here? Twisting Elizabeth Warren’s tail?
people are making too big a deal of that i think. why wouldn’t they upsize them? they had two oversubscribed term ops, and you’ve got pressure from bill auction settlements, etc. they’re going to upsize these things as needed until they get back to an abundant reserve regime with a buffer. you’ll probably see these adjustments all the time from now through January until all the TOMOs are eventually soaked up into POMOs
Also, remember those are separate from the securities bought for balance sheet growth. the O/N and term ops are for liquidity management purposes, to smooth things out until the POMOs have permanently increased the level of reserves. so they will, almost by definition, be lumpy.
THX, Heis. I can sleep tonight. Thought maybe some of the big boys were pulling out of the bond market.