Bond markets are finally getting interesting, with the Bank of England launching emergency purchases to restore order in the gilt market. Since I am not in constant contact with people trading gilts, I will just offer a tentative description of what seems to be going on, and what it “really means.”
I'm interested to know why the BoE came out with an announced time limit to these purchases and not a straight "whatever it takes" (however long it's needed). (I think Daniela Gabor pointed this out on Twitter) could this be the BoE attempting to put pressure on the Treasury/executive to roll-back?
There's clearly really uncomfortable relations between Treasury and BoE right now...
I'm interested to know why the BoE came out with an announced time limit to these purchases and not a straight "whatever it takes" (however long it's needed). (I think Daniela Gabor pointed this out on Twitter) could this be the BoE attempting to put pressure on the Treasury/executive to roll-back?
There's clearly really uncomfortable relations between Treasury and BoE right now...