- Bond buying is adding a liquidity excess that is bullying market rates to extraordinary lows, practically into submission.
- It looks too much and should be unwound, but not just yet, it seems. At least Chair Powell is not giving too much away so far.
- In Europe, inflation expectations as measured by inflation swaps have hardly budged, if not slightly declined, since the ECB announced its revised inflation target - the ECB faces a credibility problem and has so far failed to inspire markets following the strategy review.
For further details see:
Rates Spark: Are We There Yet?