Governments are stepping-up expenditures and deficits. Even US Mnuchin talks about at least $850 bn. Eurogroup anounced about 1% of European programmes plus leeway for national budgets to do wide support to affected workers’ incomes and to SMEs, adding-up to more than 2% 1/4
To that, the Euroup added “liquidity facilities of at least 10 per cent of GDP, consisting of public guarantee schemes and deferred tax payments. “These figures could be much larger going forward” See @mariofcenteno at ft.com/content/cf4679…
I said a few days ago“A HUGE increase in public expenditure to support people’s incomes and keep firms/sectors afloat must happen.Central Banks must use QE to maintain low sovereign bond yields and low sovereign spreads everywhere.Yes, it is their task now. No inflation risk” 3/4
I added: “more QE “going beyond the self-imposed limit of 33%” may be necessary.All European sovereign bonds yields(credit benchmarks) are now going up, so it’s time for increased CB’s QE market interventions to ensure appropriate transmission of expansionay monetary policy 4/4
