Work will continue after QE ends
Once we no longer need to add new stimulus through QE, we’ll stop increasing the size of our holdings of Government of Canada bonds.
A lot of monetary stimulus will remain in the system—and the economy will still need it. So, to keep our bond holdings relatively stable, we’ll need to buy enough bonds to replace those that are maturing.
Essentially, we will be reinvesting the proceeds of maturities, so we call this the reinvestment phase.
Eventually, when we need to start reducing the amount of monetary stimulus, you can expect us to begin by raising our policy interest rate. That means it is reasonable to expect that when we reach the reinvestment phase, we will remain there for a period of time, at least until we raise the policy interest rate.
But, ultimately, when we arrive at the reinvestment phase and how long we stay there will depend on the strength of the recovery and how inflation evolves.