- European Central Bank announced an additional €600 Billion to be added to the Pandemic Emergency Purchase Programme (PEPP).
- PEPP program is now €1.35T.
- Federal Reserve balance sheet soars past $7 trillion.
The European Central Bank just announced an additional €600 Billion ($676 billion) in funding for the Pandemic Emergency Purchase Programme (PEPP). Launched in March, the Pandemic Emergency Purchase Programme aims to stimulate the economy amid coronavirus.
Furthermore, The European Central Bank is still retaining the -0.50% deposit facility interest rate. The deposit facility interest rate determines the amount financial institutions must pay to deposit money with the central bank. With a negative interest rate, the central bank hopes that institutions will instead lend money that deposit, and therefore stimulate the economy.
Federal Reserve Balance Sheet Soars
The coronavirus has affected global economies with the United States’ Federal Reserve balance sheet soaring past $7 trillion for the first time. The rapid increase equates to almost a three trillion surge since the beginning of the year.
Furthermore, with the MZM money supply up 20% since January, fears of inflation loom overhead. As a result, many investors have turned to alternative assets that may act as a hedge against hyperinflation.
Alternative assets include both precious metals and digital assets with a limited supply. Coronavirus has bolstered Bitcoin’s narrative as a hedge against hyperinflation as the digital asset’s inflation rate is now just 1.8% per annum.
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