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The Removal of the Comfort Blanket - QE Tapering, Rate Rises

beebee
edited March 2017 in The OT Bullpen
Article Highlights:

There's no denying that monetary policy has reached a critical turning point.

The removal of QE effectively has the same effect on markets as raising interest rates and usually the first step in tightening.

When the US Fed began tapering QE (tightening) in early 2016 it almost set the U.S. markets into recession. This QE tapering was described as equal to (12) interest rate rises.

As the US Fed tightens by raises rates in March of 2017, the ECB now begin winding down QE from €80bn to €60bn a month when the current program expires in March, and China takes action to choke off a property bubble and rein in shadow banking.

Article:
telegraph.co.uk/business/2016/12/08/europes-comfort-blanket-pulled-away/

Additional Research: Measuring the Macroeconomic Impact of Monetary Policy at the Zero Lower Bound
faculty.chicagobooth.edu/jing.wu/research/pdf/wx.pdf
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