ECB May be Forced to Wind Down Bond Buying Program

The European Central Bank (ECB) may have little choice but to wind down its bond buying program next year, whether or not Eurozone inflation picks up, according to the Financial Times.

The Eurozone's improving economy has led the ECB to scale back its purchases in April, improving expectations that policymakers will set out a timeline for further tapering in the next couple of months, according to the article. A speech from ECB President Mario Draghi will be the chief focus for markets at an annual gathering of central bankers in Jackson Hole, Wyoming this week. However, the central bank may be running out of bonds to buy.

The program restricts its purchases to a third of each country's debt in circulation and supply is running thin. However, before scaling back the bond buying program, Mr. Draghi wants to see a "durable" increase in the level of prices. Analysts estimate consumer price inflation will be 1.4 percent over the course of 2018, according to Bloomberg data. If this proves to be accurate, then the ECB's issues around supply will grow more acute, according to Financial Times.

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