Morgan Stanley (MS-US) Analysts said on Friday (4th) that the world’s major central banks are regarding to launch the “largest quantitative tightening in history”, which is estimated to be worth 2.2 trillion in the next 12 months.Dollarfinancial support will disappear.
Soaring global inflation is forcing the U.S. Federal Reserve (Fed), European Central Bank (ECB), Bank of Japan (BOJ) and Bank of England (BOE) to roll back coronavirus support measures.
The Fed is now expected to raise rates five times this year, the most since 2005-06. BOE also ushered in the second rate hike in 3 months this week; while the ECB is ready to raise interest rates for the first time in 10 years.
“The balance sheets of the big four central banks will peak in May,” analysts at Morgan Stanley said, adding that a reduction of 2.2 trillion is expectedDollarIt will be reduced by regarding 500 billion in 2018Dollar4.5 times the time.
“The ECB’s balance sheet is expected to actually shrink faster than the Fed between May 2022 and May 2023 due to reduced liquidity through the Targeted Long Term Refinancing Operation (TLTRO),” the analysts noted. “Here refers to the ECB toEURUltra-low prices and unlimited funding from district banks.
