BOE and Fed Wrong to Start Rate Hikes Before QT, BOE Paper Says
- Rapid QT can be a perfect substitute for rates, official finds
- Staff paper does not represent BOE opinions, author says
The Bank of England in London.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
The Bank of England and the Federal Reserve were wrong to raise interest rates before starting to unwind quantitative easing, according to one of the BOE’s own researchers.
Both the UK and US central banks have been shrinking their balance sheets by selling assets bought over the last 15 years under QE, once borrowing costs had been cut close to zero.