The Federal Reserve Building stands in Washington April 3, 2012. REUTERS/Joshua Roberts
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Major central banks took significant steps last week toward dismantling the emergency stimulus they'd used to lubricate financial markets and escape recession in the decade since the financial crisis.European Central Bank President Mario Draghi said a decision to halt bond purchases by December would still leave significant monetary stimulus beyond then, especially as euro-zone rates won't go up before the summer of 2019 .Bank of America Corp. estimates the combined balance sheet of the world's biggest central banks is still $11.8 trillion higher than when Lehman Brothers Holdings Inc. collapsed in September 2008, and just short of a $12.3 trillion peak.JPMorgan Chase & Co. economists reckon a gauge of interest rates in the developed world is below 1 percent and won't be above 1.5 percent a year from now.At 1.75 percent to 2 percent, the Fed's rate target range is still below officials' 2.9 percent estimate of the neutral rate that neither spurs nor restricts growth.It also reminded everyone that the proceeds of maturing assets will be reinvested, meaning it's far from ready to follow the Fed in shrinking its balance sheet.Almost two years since the RBA's last rate move, Lowe said last week that any tightening is far away because of weak wage growth.
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