opinion | Central banks at war with the markets?

While central banks have generally assumed in recent years the role of ultimate savior of the market – and for the more optimistic, of the economy in general – as we have seen again at the height of the Covid-19 crisis, they have recently almost all gone into war mode against the market, including against the consequences of their own actions! This may augur turbulent episodes on global stock markets.

Latest example: the central bank of England. While it has been raising its key rates since the end of 2021 already, ahead of the European Central Bank and even the American Federal Reserve (Fed), it announced on September 28 to everyone’s surprise a bond purchase program long-maturity British government bonds for an upcoming amount of 65 billion pounds (nearly 75 billion euros). The objective is to counter the rise in long rates, even as it was preparing to deflate its balance sheet – a decision postponed.