In the game of quantitative easing (QE), there are costs to being late. This chart from the Market Insights team shows that the European Central Bank’s (ECB) latest QE move is coming late in the QE game. With QE, central banks are aiming to raise inflation expectations and lower nominal and real yields. When the Federal Reserve (Fed), the Bank of England (BoE) and even the Bank of Japan (BoJ) implemented their various QE programs, eurozone inflation and German yields were higher and, as a result, there was more potential for QE to do its “work” by lowering interest rates and stimulating the economy, according to Stephanie Flanders, Chief Market Strategist for UK and Europe. However, with eurozone inflation and yields already at extremely low levels today, the ECB has a bigger mountain to climb than the Fed, BoE and BoJ faced when they launched their programs. As a result, a European recovery will be more reliant on further weakening of the exchange rate and confidence that the QE will work its “magic.”