THE FEDERAL RESERVE, the European Central Bank (ECB) and the Bank of England have all engaged in some form of quantitative tightening (QT). This involves central banks either not reinvesting maturing government debt or, in the Bank of England’s case, selling bonds to shrink their balance-sheets. Partly as a result of central banks’ relative absence from government-bond markets as they implement QT, yields—which move inversely to prices—have been rising.
From the May 4th 2024 edition
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