(Bloomberg) -- The European Central Bank should weigh all available options when discussing how to shrink its balance sheet more quickly — even after the latest bond-market rout in Italy, according to Governing Council member Bostjan Vasle.
“I’m in favor of starting debate on next steps regarding QT,” the Slovenian official said in an interview in Marrakech, where he’s attending meetings of the International Monetary Fund. “There are several options, which must be put on the table.”
Vasle signaled he may be more inclined to consider selling bonds purchased under the ECB’s older APP program than calling an early end to reinvestments under the Covid-era PEPP portfolio. Rising bond yields suggest that market “participants are realizing that the ECB is more or less done with interest rates increases, and expectations for a longer period of higher interest rates is starting to be reflected,” he said.
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