European Central Bank Sets End Date For $3 Trillion Stimulus Program

The European Central Bank has announced plans to wrap up its massive stimulus program at the end of 2018. Since launching the program of quantitative easing in March 2015, the central bank has bought about €2.5 trillion ($2.9 trillion) of bonds and other assets to stimulate the eurozone economy. The central bank said Thursday that it would reduce its bond purchases in the final three months of the year, before halting them altogether at the end of December. At that point, it will have created almost €2.7 trillion ($3.1 trillion) in new money for the program.The program, under which the central bank has been buying tens of billions of bonds each month, helped support the economy by keeping borrowing costs low for households and businesses. That, in turn, increased spending and helped spur economic growth and inflation.The US Federal Reserve purchased $4.5 trillion in investments over the years, while central banks in the United Kingdom and Japan deployed similar measures. The Fed ended its program in 2014 and has now raised interest rates seven times since 2015. It expects to raise rates two more times this year, from a range of 1.75% to 2% at present.

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If the ECB stops buying bonds at the end of 2018, someone will need to pick-up the slack or we'll get a route in corporate bonds in 2019.
 

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The ECB has printed €2 Trillion 2017 to 2019. That has boosted EZ GDP its not real GDP.. its printed paper they look rich... but look at Italian NPL debt. EU Youth unemployment....

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It seems that EU has a many problems. Industrial production was the latest indicator to disappoint expectations after business and investor confidence slumped and a gauge for euro-area manufacturing fell to the lowest level in 15 months..

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The ECB did this (QE) to manipulate currencies, keeping the € under-priced and promoting EXPORTS.

Don't get fooled.

Thanks

 

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2 hours ago, John Houbion said:

The ECB did this (QE) to manipulate currencies, keeping the € under-priced and promoting EXPORTS.

Don't get fooled.

Thanks

 

John, your analysis is largely correct.  I would add that it was also done to keep Greece afloat, and to transfer Greek risk held by German Banks from Deutsche Bank to the ECB.  The underbelly of Europe is the EU's big problem - Greece, Italy, Spain.  They have  not figured out a solution so simply kick the can down the road. 

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