European Central Bank

Markets React to ECB Stimulus, U.S. CPI Data, and Continuing Hopes on Trade Talks

September 12, 2019

Policymakers at the European Central Bank as expected cut the deposit rate by 10 basis points to minus 0.50%, announced an open-ended asset purchase program to start in November at EUR 20 billion per month, said targeted LTRO operations will carry the average deposit rate, and introduced a a 2-tiered system of reserve remuneration in […] More

European Central Bank Moving Closer to Reducing Interest Rates and Taking Other Stimulative Actions

July 25, 2019

The European Central Bank Governing Council left policy settings unchanged but signaled likelihood of a multi-pronged stimulus after September’s fuller review. A zero percent refi rate has been flanked by a negative 0.40% deposit rate and a 0.25% marginal lending facility rate since cuts made in September 2016. The ECB leadership is in transition; IMF […] More

ECB and Turkish Monetary Officials Send Dovish Signals

July 25, 2019

The European Central Bank Governing Council left policy settings unchanged but signaled likelihood of a multi-pronged stimulus after September’s fuller review. A zero percent refi rate has been flanked by a negative 0.40% deposit rate and a 0.25% marginal lending facility rate since cuts made in September 2016. The ECB leadership is in transition; IMF […] More

ECB Governing Council Meeting: No Change in Stance Was Expected, and None Got Delivered

April 10, 2019

At the ECB Governing Council meeting, the structure of Euroland central bank interest rates since March 2016 (a zero percent refinancing rate flanked by an overnight deposit rate of -0.40% and a marginal lending facility rate of 0.25%), was again retained, and forward guidance reaffirmed that rates would stay at present levels or lower at […] More

ECB Policy Shift Drives Stocks and Sovereign Debt Yields Lower, Dollar and Yen Higher

March 7, 2019

The Governing Council of the European Central Bank revised projected growth and inflation significantly downward, postponed the first possible interest rate hike to beyond 2019, announced a third round of quarterly targeted longer-term TLTROs to help “preserve favorable bank lending conditions and the smooth transmission of monetary policy,” retained a negative risk balance in spite […] More

European Central Bank Leaves Interest Rates Unchanged and Stops New Asset Purchases

December 13, 2018

The ECB’s interest rate structure has been at a record low since March 2016, consisting of a zero refinancing rate flanked by an overnight deposit rate of negative 0.40% and a marginal lending facility rate of +0.25%. At its last policy review of 2018, the central bank’s Governing Council reaffirmed that these rates are likely […] More

European Central Bank Accentuates the Cup Being Half Full

October 25, 2018

Today’s ECB Governing Council meeting was not one associated with updated macroeconomic forecasts, but the President Draghi’s introductory statement and press conference expressed confidence in a coming convergence of currently muted inflation on the target of less than but close to 2%. The Council expects continuing positive broadly based economic growth despite some recent weakening […] More

Focus Turns to Central Banks

October 25, 2018

The dollar this Thursday is narrowly mixed with upticks of 0.2% against the yen and Swiss franc and of 0.1% versus the loonie but downticks of 0.3% vis-a-vis the Aussie dollar and peso, 0.1% relative to sterling, the euro, and kiwi. The yuan is steady. Japan’s Nikkei plunged 822 points or 3.7%. Share prices also […] More

ECB Policy Meeting Produces No Surprises or Significant Developments

September 13, 2018

The European Central Bank Governing Council left its policy settings unchanged. The three key interest rates — a zero percent refinancing rate flanked by a -0.40% deposit rate and a 0.25% marginal lending facility rate — will not be increased through the summer of 2019. Asset purchases will total EUR 30 billion this month and […] More

ECB Decisions and Draghi Press Conference

June 14, 2018

Investors found the ECB message today somewhat more dovish than feared. To be sure, the released introductory statement confirmed that new asset purchases will be completed by the end of this year. Draghi’s statement asserts that “progress towards a sustained adjustment in inflation has been substantial so far. With longer-term inflation expectations well anchored, the […] More

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