Central Bank Asset Purchases and Inflation Expectations

13 Pages Posted: 11 Apr 2013

See all articles by Boris Hofmann

Boris Hofmann

Bank for International Settlements (BIS) - Monetary and Economic Department

Feng Zhu

Ant Financial

Date Written: March 2013

Abstract

This article analyses the effect of the asset purchase programmes implemented by the Federal Reserve and the Bank of England in the wake of the global financial crisis on market- and survey-based measures of inflation expectations. The analysis suggests that central bank asset purchases did have significant effects, but that their quantitative importance is uncertain. While short- and longer-term inflation expectation measures displayed sizeable upward movements towards pre-crisis levels during the implementation of asset purchase programmes, the reaction of inflation swap rates on the days of programme announcements suggests that central bank asset purchases were probably not the main driver of these shifts.

JEL Classification: E31, E52, E58

Suggested Citation

Hofmann, Boris and Zhu, Feng, Central Bank Asset Purchases and Inflation Expectations (March 2013). BIS Quarterly Review March 2013, Available at SSRN: https://ssrn.com/abstract=2248489

Boris Hofmann (Contact Author)

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Feng Zhu

Ant Financial ( email )

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