Quantitative easing now looks permanent – and has turned central banks into pseudo governments

After a pause of a few months, the world’s leading central banks are “printing” money again to try to bolster their economies. Commonly known as quantitative easing or QE, the European Central Bank (ECB) resumed its programme just before the turn of the year. The backdrop is lukewarm growth, a looming recession in Germany, and persistent fears of Japanese-style deflation.

The ECB is creating new euros to buy bonds at a monthly pace of €20 billion (£17 billion). It is also signalling that QE has moved from being a temporary innovation to a permanent feature of monetary policy.

Meanwhile, the US Federal Reserve has also been running a new asset-buying programme, creating US$60 billion (£46 billion) a month since September. It insists for technical reasons that this is not QE, though many observers disagree. The Bank of Japan has been following a similar policy almost continually for the past decade, while there have been recent hints from the Bank of England that it might return to the fray for the first time since 2016.

Συνέχεια ανάγνωσης  εδώ: theconversation.com