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...The QE episode shows how expensive malfunctioning structures can be. This is not a proposal to weaken the independence of the Bank of England or modify its objectives....
...They reversed the ship in 2019 and resumed QE to maintain a ‘floor’ system for setting rates....
...In today’s newsletter: Kirkland & Ellis confronts a dealmaking slowdown The PE dealmaker who’s everywhere right now KKR jumps on a deal Carlyle snubbed QE+PE= K&E Chicago law firm Kirkland & Ellis has...
Doug Barrowman; self-checkouts; UK price data; large-language models; Dominic Cummings; Eric Adams; QE; and algorithms
...Renowned for viscerally disliking bankers and vocally advocating fiscal austerity, King oversaw a QE design that rewards the former and reinforces the latter....
...If central banks can demonstrate that effective QT can reverse QE without many harms, it would rehabilitate QE....
...Michael Saunders, who left the Monetary Policy Committee last year, said the losses were likely to be larger because the central bank had bought longer-dated bonds than overseas counterparts that launched QE...
And the case for slow QT
...A further large dose of QE was implemented at the start of the pandemic....
...So a new QE programme sends a louder signal to markets (Fed to the rescue!) than a new round of QT....
...Unlike plain-vanilla QE, hardly any other central banks have copied these innovations. That was a wasted opportunity....
...When the Fed flooded the market with liquidity via QE, it became unworkable to manage prevailing interest rates through the old tool: the federal funds rate as managed through the ad hoc buying and selling...
...It’s well-known that the Riksbank — like every other central bank that dabbled with QE over the past decade-plus — is nursing some hefty losses on its bond portfolio....
...Elsewhere on Tuesday… — The trouble with old men (Granta) — Can we only get a bear market when the BoJ ends QE?...
...The transfers represent both the continuing cash flow losses of the QE scheme, and gains or losses made by the central bank when government bonds mature or the central bank sells the assets, the bank said...
Easy money has not bred the undead
...But the committee said the extent to which QE had boosted the economy — especially in its latter rounds, after the Brexit referendum and Covid — was still unclear....
...It is the reverse of QE and has been going rather well so far. Why is there active and passive QT? All central banks selling assets engage in passive QT....
...Since 2009 it has promised the central bank that it would make good any losses it might suffer from QE, especially after it started sweeping any QE profits back to the Treasury in 2012....
...In July, the BoE forecast it would make a net loss of more than £150bn over the next decade as it unwinds QE....
Officials raise end of balance sheet wind-down at December meeting
...I’m reminded of an ex-BoE friend’s stylised version of the 2021 process of writing the HoL report on QE: “What about all this QE then?!” “Well, you started it!” etc....
...Continuing with QE did two things....
...The BoE published its latest estimate for transfers from the Treasury to cover losses on its asset purchase facility — which houses its holdings of bonds bought under QE — on Tuesday....
Pandemic-era €1.7tn stimulus programme had been due to wind down by end 2024
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