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Why Would The Bond Vigilantes Spare The Bank Of England?
Since announcing an emergency bond market intervention last week to prevent the UK pension complex f
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Central banks would be wise to abandon qt. Tighten or loosen policy using short rates. The nominal economy will grow and the balance sheet will be a smaller percentage of the economy over time, and it’s duration will shorten. It’s only a dilemma if you make it one.
Such a rational suggestion of how CBs should proceed with QT, sadly that likely means they will completely ignore this path until it is too late.
I see no deus ex machina, except maybe us. I hope someone has a enough good sense not to let that happen. Lend-lease is a bit past its sell-by date.