Quantitative Easing (QE) is the term used to describe artificial purchasing of bonds by central banks globally. The aim has been to suppress interest rates and stimulate ‘normal’ economic activity in the aftermath of the GFC. 

It’s calculated that developed nations such as the US, Japan, Eurozone countries and China have pumped over $18 trillion into the global economy. Following comments from Janet Yellen last week investors are beginning to contemplate what the unwinding of QE actually means. 


Brett Gillespie, Head of Global Macro at Ellerston Capital, estimates that QE has effectively suppressed long-term interest rates by around 100 basis points. As Central Banks commence what they’re anticipating will be a ‘gradual and steady’ unwinding process, Gillespie argues the transition could be a bit bumpier than they’re predicting. 

Brett Gillespie is Head of Global Macro at Ellerston Capital