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Small but important win for ECB hawks over QT
The European Central Bank’s inflation hawks have won a small but important victory with accord on starting an examination of quantitative tightening through gradually reducing the stock of €5tn of bonds held on the Eurosystem’s swollen balance sheet. Agreement to discuss principles on QT in December was part of a 27 October package of measures including a further 0.75 percentage point rise in the ECB’s deposit rate, doubling it to 1.5%. This takes ECB rates to their highest since 2009. It puts the ECB on course to increase the deposit rate to 2% in December, generally seen as ‘normalisation’ after an ... (full story)