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Another half trillion of bond purchases

Policymakers have signalled their intention to further expand the Pandemic Emergency Purchase Programme at the monetary policy meeting next Thursday. At a minimum, we think they will add a further €500bn to this programme, bringing the total to €1,250bn. They are also likely to state that they expect to continue with net purchases under the emergency programme until at least mid-2021 and to reinvest maturing principal payments for a significant period beyond that.

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