QOTD: Dovish Taper

The ECB just announced a reduction in its monthly QE purchases but an extension in the amount of months, from Jan 2018 as was previously scheduled all the way out to September 2018. Here’s my pal Peter Boockvar to explain:

The ECB is saying that they will cut in half their QE purchases in 2018 to 30b euros per month thru September. He couched it in dovishness by saying they can always increase it if needed and that NIRP will remain in place “well past” the end of QE. They will also reinvest maturing securities just as the Fed did with their balance sheet and this will be “for an extended period of time.” Keep in mind though, if the ECB is actually successful in generating inflation closer to 2% (they are at 1.5%) sooner rather than later, this could change again.

Bottom line, this is pretty much exactly as has been telegraphed.


Peter Boockvar
Managing Director, Chief Market Analyst
The Lindsey Group LLC

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