Nagel Hints at ECB QT Without Caps, Praising Market Resilience

Bundesbank President Joachim Nagel argued that the European Central Bank probably doesn’t need to manage a planned roll off in its bond portfolio, highlighting “sufficient resilience” in financial markets.

Central banks including the Federal Reserve have in the past set limits to how quickly they allow their balance sheet to shrink to ensure investors don’t balk at so-called quantitative tightening. The issue of caps hasn’t really come up in the public debate in the euro zone, where this month policymakers are due to decide on the key pillars of their strategy to unwind debt of nearly €5 trillion ($5.2 trillion).