BOE's Hauser: Unwinding QE will become an integral part of future tightening strategies
Remarks by BOE executive director for markets, Andrew Hauser
- Balance sheet will be structurally larger in the future, even after QE unwinds
I don't think anyone expects differently, especially on the part of larger balance sheets in the post-pandemic era. It has been the case after every major crisis.
Hauser also makes some interesting remarks on market dependence towards central banks and how that has had an adverse impact on functioning as opposed to a market-led approach, in which they are trying to work towards to.
As much as that sounds righteous, central bankers got themselves in this mess and to expect the market not to pick up on that and go with the flow is asinine.
To make his point, Hauser says that any future accommodative policy is likely to be made clear that central banks are not going to respond as aggressively to a dysfunction unrelated to a global pandemic, and that the market should expect that.
Well, we'll see if he has the same kind of resolve and guts to do so when the market is kicking and screaming. It's not just about talking the talk, one has to walk the walk.