Content adapted from this Zerohedge.com article : Source
The Central Banks easing in the last decade proceeded at an unprecedented rate.
In 2016, Citi asked "Where is the utility in marginal QE" citing their belief that the longer QE continues, the bigger the marginal cost until it becomes a detriment.
Citi started raising questions when the owned $18T in assets. Since that time, the total increased another $3T to a total of $21T.
To put it in perspective, Central Banks now owned over 40% of global GDP, more than double the amount of 17% they had before the banking crisis less than a decade ago.
With such a huge stake, Central Banks are nervous about the "recovery" stalling. If markets start to sell off, it is these institutions that could see their balance sheets serverely hurt.
Citi's Hans Lorenzen said last November:
In the context of a self-reinforcing, herding market, the pivot point where the marginal investor is indifferent between putting more money back into risk assets and holding cash instead is fluid. But when the herd suddenly changes direction, the result is a sharp non-linear shift in asset prices. That is a problem not only for us trying to call the market, but also for central bankers trying to remove policy accommodation at the right pace without setting off a chain reaction – especially because the longer current market dynamics run, the more energy will eventually be released.
That seems to be a growing fear among a number of central bankers that we have spoken to recently. In our experience, they too are somewhat baffled by the lack of volatility and concerned about the lack of response to negative headlines.... Our guess is that sooner or later in the process of retrenchment they will end up going too far – though that will only be obvious with hindsight.
Non-adapted content found at zerohedge.com: Source
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