- We are aware there is a risk we could be wrong about the $20-$60 billion range
- Recognizes there is a risk that QT may need to end earlier than expected
- Should be able to reduce settlements balances to the $20-60 billion range sometime in 2025
- Any decision to end QT early would be linked to factors such as persistent upward pressure on the overnight repo rate plus widespread take-up in the overnight repo operations
- Will be watching funding markets closely for any pressures that could be longer lasting
The Canadian federal government is under some growing fire for its Canada Mortgage Bond purchases while no one is confident the Bank of Canada knows what it’s doing with its balance sheet.
This article was written by Adam Button at www.forexlive.com. Source