How does the BOE unwind its holdings when the time is right? David Smith outlines a strategy in the Times of London. Expect the Fed to follow a similar blueprint.
How will the Bank avoid this? The answer is that it will move first on interest rates — perhaps hiking several times — before it tries to unwind quantitative easing. Monetary policy has become a two-club operation and interest rates are quicker and easier to swing; 5% is normal for Bank rate, not 0.5%.