ECB monetary policy has become incredibly complex because of the pandemic. There are two bond buying programs and we have the TLTROs. Every measure can be eased or tightened in multiple dimensions. The ECB is juggling five preliminary end dates for these three key policy measures. Then there is the guidance for interest rates, which has to be adjusted accordingly. The side-effects of the ECB’s unprecedented balance sheet growth are tanking money market rates, which will also have to be managed at some point. Enter the ECB’s hall of mirrors, where everything is interconnected and nothing happens in isolation:

 

 

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