Implications of Unwinding QE

Implications of Unwinding QE

Trevor Pugh

20 years: Trading & hedge funds

It did not take long after the introduction of QE for market commentators to become overly concerned about a future problem with the policy: what happens when the central banks unwind QE? In this video, Trevor discusses the issues associated with unwinding the policy, the stages of QE and the timing of the unwind.

It did not take long after the introduction of QE for market commentators to become overly concerned about a future problem with the policy: what happens when the central banks unwind QE? In this video, Trevor discusses the issues associated with unwinding the policy, the stages of QE and the timing of the unwind.

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Implications of Unwinding QE

12 mins 37 secs

Overview

This essentially involves a rapidly expanding economy that requires reversing QE in order to slow it down. To do this, central banks can take their time unwinding QE, and use interest rates to tighten policy where necessary. However, associated with this are a wide array of concerns; for example, huge central bank losses.

Key learning objectives:

  • Identify the 4 stages of QE

  • Discuss the biggest concerns of the unwind

  • When is the best time for banks to reduce their balance sheets?

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This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.

Summary
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