In addition, the QQE has the effect of generating proactive demand for funds, including business fixed investment and housing investment, by converting households’ and firms’ “deflationary sentiment” – in other words, a natural way of thinking that prices will not rise.
Specifically, currently the global liquidity has become a bigger concern than it was in pre-2007 period what with ultralow and near-zero policy rates and major central banks’ balance sheets 1.50 to 3 times their pre-2007 levels, adding about USD 4 trillion in incremental central bank liquidity.