Central banks have long bought and sold government bonds to influence money supply. Don’t get locked in: Despite expansionary monetary and fiscal policy, central banks appear to see inflation risks as transitory. QE is not a cure-all: Central banks have seemed to assume that any adverse shock justifies another round of bond buying. But exactly how these central banks will undertake this adjustment and announce it to investors is unclear. The pace of QE needs to be dialled back over the coming months, and central banks should be helping investors plan accordingly.

Source: Mint July 21, 2021 16:18 UTC