ECB Must Cement Its QT Plans to Avoid Confusing Markets
- Officials preparing to mull early end of PEPP reinvestments
- Faster retreat in inflation fuels bets on interest-rate cuts
This article is for subscribers only.
The European Central Bank’s window to begin phasing out its last active crisis tool is closing, with a failure to act likely to flummox markets down the line.
Rapidly retreating inflation is feeding expectations that interest rates will be lowered as early as March — well before officials currently plan to start winding down the €1.7 trillion ($1.8 trillion) of bonds bought under the pandemic-era PEPP initiative.