As the last instalment of this column observed (‘The dangers of continuing with unconventional policies’, 20 August), there is a rising drumbeat of debate over the unwinding of America’s unconventional monetary policy—in particular, large-scale asset purchases, often called quantitative easing (QE)—as well as the eventual normalization of its policy interest rate to above the near-zero level at which it has been stuck since the global financial crisis.
The topic came up for discussion during the recent (virtual) Jackson Hole meeting of central bankers, where US Federal Reserve chief Jerome Powell sent markets his strongest signal yet that the US central bank is preparing to wind down its asset purchases, at present a staggering $120 billion per month. In a much-watched speech, Powell asserted that “substantial further progress” had been made on the Fed’s twin goals of keeping inflation on a low…
