QE’s coming, probably in January

It seems clear that the ECB will soon embark on a full-blown quantitative easing programme incorporating sovereign debt purchases. The key questions now are when and how big? While we think that the contingencies for QE set out by President Draghi have already been met, Governing Council members may want more time to assess their existing policies. Whatever the timing, though, we suspect that a QE programme won’t be big enough to revive the euro-zone economy or eradicate the threat of deflation.