Has The EU Hit Its QE Limit?

Some European Central Bank policy makers see room for little more than 200 billion euros ($235 billion) of purchases under the institution’s bond-buying program next year, according to central-bank officials familiar with the matter. The ECB is likely to run out of available debt under current rules at just over 2.5 trillion euros, the officials said, asking not to be named as the matter is private. With purchases set to reach 2.28 trillion euros by the end of 2017, talks are focused on how to spread the additional capacity, they said. Such a limit is at the lower end of volumes under discussion, setting the Governing Council up for a potentially difficult policy meeting on Oct. 26 as some members fret about ending quantitative easing while inflation remains weak. The ECB currently buys 60 billion euros a month of debt, and Bloomberg reported on Friday that it’s considering cutting that by at least half from January, extending it to September with a proviso to do more if needed. The council hasn’t officially discussed how to extend the program, and the Executive Board has yet to make its proposal. An ECB spokesman declined to comment.