Central Banks
ECB Hawks Target Early 2023 to Start Unwinding Balance Sheet
- Officials favor balance-sheet shrinkage to run in background
- Framework decision on QT would mean they can refocus on rates
The European Central Bank headquarters in Frankfurt, Germany.
Photographer: Alex Kraus/BloombergThis article is for subscribers only.
Hawkish European Central Bank officials aim to start unwinding the institution’s €5.1 trillion ($4.9 trillion) asset hoard by early 2023 while retaining interest rates as their primary monetary-policy tool, according to people familiar with the matter.
A consensus is emerging among some Governing Council members that the process of shrinking the balance should run in the background while the ECB focuses on setting borrowing costs, they said, declining to be identified because discussions on the matter are private.