Business

The economy

Global economy

Opinion

If you thought quantitative easing (QE) was dead and buried, you may soon be in for a shock.

The US Federal Reserve is preparing the ground for a rapid return to net bond purchases, deeming it necessary to ensure sufficient liquidity for the financial system.

It will not be called QE. It will be deemed open market operations – TOMO or POMO in the obfuscating vernacular – and will be presented as a technical adjustment to manage bank reserves and the plumbing of the credit markets.

Krishna Guha and Marco Casiraghi from Evercore ISI expect the Fed to start mopping up a net $US35 billion ($53.5 billion) of US Treasury debt each month as soon as January, or March at the latest.

Mark Cabana, who managed QE at the New York Fed before joining Ba

See Full Page