European Central Bank (ECB) officials were reportedly discussing options to accelerate the downsizing of the agency’s 5 trillion euro ($5.5 trillion) bond portfolio.
While the ECB is in the midst of a historic interest rate hike, it has been stated that policy makers may already accelerate the contraction in its balance sheet.
Some hawkish ECB officials have begun to ponder options to accelerate the downsizing of the agency’s 5 trillion euro ($5.5 trillion) bond portfolio, Bloomberg reported, citing close sources.
The sources, who requested anonymity, stated that some ECB officials are open to considering the sale of securities from the ECB’s portfolio to complete the steps taken so far, while others may prefer to gradually reduce the reinvestment of bonds purchased during the pandemic.
Any move could give impetus to the reduction of past stimulus that started last year as inflation rose.
Sources also said that there has been no formal discussion on this issue in the Governing Council and that no decision has been taken recently.
Stopping net asset purchases, the ECB began shrinking its bond portfolio in March, allowing an average of 15 billion euros per month to be rolled over instead of being reinvested as before. That pace is expected to roughly double, with reinvestments halting altogether next month.