European Central Bank plans to wind down quantitative easing

Interest rate hikes to remain on hold for at least a year

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The European Central Bank (ECB) communicated its plan today to wind down its asset purchase program (quantitative easing, or QE) by the end of this year. The ECB announced it would begin a three-month period of “tapering” in October, reducing its bond purchases to 15 billion euros per month from a current level of 30 billion. The ECB said it will continue to reinvest the principal from its holdings for an extended period of time in order to maintain favorable liquidity conditions and ample monetary accommodation. We at Invesco Fixed Income believe this plan should continue to support asset prices and ensure a smooth normalization process.

Interest rates to remain steady

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