“The covid crisis to date has demonstrated that quantitative easing (QE) and the forecasting on it have been effective in a particular situation,” said Bank of England (BoE) Governor Andrew Bailey, during his speech at the Jackson Hole Symposium on Friday.
“The structural factors of low equilibrium interest rates suggest that the use of central bank balance sheets for monetary policy will be longer than expected.”
“It appears from today’s perspective that we were overly cautious about our remaining firepower prior to COVID.”
“QE has clearly acted to break a dangerous risk of transmitting severe market tension to the macro economy.”
“There are times when we have to go big and go fast.”
“There is some evidence that the impact of QE over the past decade has been greatest during times of market dysfunction and illiquidity.”
“If the effects of QE are more powerful in the crisis states of the world, we may need to make sure that we have enough leeway in the future to repeat it.”
“The determinants of how QE unfolds may be more subtle than previously thought, and the COVID crisis offers a new lens through which to assess its role.”
“The central bank’s balance sheet may have more of a countercyclical role and function than the only evidence from the past decade suggests.”
“The easing of QE does not appear to be an imminent problem under the current conditions.”
“We should keep the options to use all our tools as open as possible, concludes that the policy mix for the next decade might be more nuanced than previously thought.”
GBP / USD retreated from its multi-month high it set at 1.3321 earlier today, but continues to trade in positive territory. At the time of writing, the pair was up 0.53% on the day at 1.3268.