Why the ECB’s ‘QE infinity’ may have stolen the futureThe European Central Bank briefly succeeded in pleasing markets with its package of renewed bond-buying and an interest-rate cut on Thursday.
The euro fell and bonds rallied — the textbook response to a dose of monetary easing. But three hours later, the euro was stronger on the day and bonds had fallen back. It was a rapid unravelling that underlines investors’ nagging doubts about the long-term effectiveness of the ECB’s efforts.
Some investors were pleasantly surprised by the decision to keep quantitative easing going until shortly before the central bank raises interest rates. Given the inflation and growth outlook, this could end up resembling the fabled “QE infinity”.
But fund managers are also concerned about whether the package can actually get the eurozone out of the low growth, low-inflation predicament it is in. On that front, the ECB’s own forecasts suggest it will struggle, sending markets right back to where they started.
https://www.ft.com/content/7f9a16cc-d56 ... 8ec6435630Must be brexit's fault...
