• Supply may outgrow demand and liquidity may dry up, leading to market turmoil
  • Policy rates a more effective instrument to tighten monetary policy
  • But ECB could potentially decide to start reducing asset stock earlier than markets currently anticipate

Never say never and always attach a caveat to whatever you say or do. That's the life of a central banker these days it seems. In any case, the ECB need not look too far away for an example of how QT has seemingly backfired before it even began. *coughs in BOE*