BoE Will Buy Unlimited Bonds To Stem Crisis. QT Target ‘Unaffected’

BoE Will Buy Unlimited Bonds To Stem Crisis. QT Target ‘Unaffected’

Just yesterday, Bank of England Chief Economist Huw Pill said plans to proceed with quantitative tightening would go ahead. It's not a good idea. UK government bonds collapsed late last week, as markets reacted violently to Liz Truss's mini-budget, and by Monday, the selloff felt existential. Five-year yields rose ~150bps over five sessions, and 30-year yields cheapened 50bps in a day. Twice. The BoE euphemistically described the moves as a "significant repricing," but that didn't even begin to
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6 thoughts on “BoE Will Buy Unlimited Bonds To Stem Crisis. QT Target ‘Unaffected’

  1. As I have commented before central banks need to be more circumspect about playing with their balance sheets. I cannot understand the fascination they have with qt. Leave it be. If you don’t increase holdings over time nominal growth takes care of your problem as your balance sheet shrinks relative to the size of your economy. As for the Truss administration, you will not last until the next election. Your fiscal policy is unfair and reckless.

    1. I must agree, follow the advice of the Fab Four and let the balance sheet be, the BoE didn’t even start their QT plans and it was forced to postpone it by the harsh market and economic realities the UK faces. The Fed has put their QT plans in motion but I expect an eventual “postponement” might come to this side of the Atlantic before year end.

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