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When Will The ECB Realize That Q(Q)E = V? - Barclays
QE (or QQE for Japan) is gaining traction with respect to the velocity of nominal GDP. Q1 GDP data are consistent with our view that QE has been sufficiently forceful in the US and Japan to support nominal GDP, despite various headwinds, including fiscal austerity in the west. US nominal GDP moved back to a 3.7% pace (saar), and is therefore close to the 4.0% average quarterly pace in the past two years. The relatively resilient pace of US GDP expansion is evidence that ‘QE3’, which began last September, has been getting traction, despite fiscal consolidation. As well, Japan’s nominal GDP grew at a pace of ... (full story)