BOE Expands Bond Buying Program Amid Historic Rout To End “Fire Sale” And Halt Market “Dysfunction”
- BOE Expands Bond Buying Program Amid Historic Rout To End “Fire Sale” And Halt Market “Dysfunction”
by Tyler Durden, https://www.zerohedge.com/
Last week we cautioned readers that the market “calm” was set to end this coming Friday when the BOE’s bond buying program was coming to an end, while making it clear that there would be no actual end as the Bank of England is by now completely trapped, and any end to QE would spark a crash, and if anything the central bank would do more not less.
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Well, just two days later we found out just how trapped the BOE has become, when early on Tuesday morning the Bank of England announced that it would widen the scope of its daily gilt purchase operations – boosting not shrinking the moral hazard that got us here – to include purchases of index-linked gilts – technically, it said it would “temporarily absorb selling of index-linked gilts in excess of market intermediation capacity” – as “a further backstop to restore orderly market conditions”, following yesterday’s epic bond rout which shouldn’t have happened, and yet it did.
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