Email of the day on the impact of quantitative tightening
Comment of the Day

September 01 2022

Commentary by Eoin Treacy

Email of the day on the impact of quantitative tightening

With regard to increasing the pace of QT, the past attempts were undertaken during periods of much lower inflation. With inflation currently much higher, dare I say it, might this time be different?

Eoin Treacy's view

Thank you for this question which is highly relevant since the Federal Reserve will be doubling the pace of balance sheet run-off to $95 billion a month within weeks. We only have two examples of significant balance sheet contraction by central banks. That was the ECB between 2012 and 2014 and the Fed between 2018 and 2019.

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