The European Central Bank starts its exit from quantitative easing
Winding down quantitative easing (QE), the enormous bond-purchases many central banks have undertaken since the financial crisis, is a delicate operation. In 2013 the news that America’s Federal Reserve was merely thinking of reducing QE set off a “taper tantrum”: the bond markets were scared and yields spiked. By contrast, the announcement by the European Central Bank (ECB) on October 26th that at the start of 2018 it would cut its monthly purchases to €30bn ($35bn) from the current €60bn, and continue at that pace at least until September, met a muted response in the markets. The euro fell by only 0.5% against the dollar. Europe’s main share indices rose by a smidgen.