European Central Bank

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

A Trust-but-Verify Approach to ECB Monetary Policy

April 26, 2018

At the third monetary policy review of 2018, members of the Governing Council left all elements of the European Central Bank’s current monetary stance unchanged. A zero percent refinancing rate will continue to be flanked by a -0.40% deposit rate and a 0.25% marginal lending facility rate. Monthly purchases of long-term assets will proceed at […] More

European Central Bank Settles on EUR 30 Billion of Monthly Asset Purchases Through at Least September

October 26, 2017

The ECB made several decisions: The interest rate structure (a zero refinancing rate, a negative 0.40% deposit rate, and a 0.25% marginal lending rate) was not changed, and a promise was made not to lift rates until well past the ending of quantitative stimulus. The current 60 billion euro pace of monthly asset purchases will […] More

Thoughts on Last Weeks ECB Meeting

September 12, 2017

At the European Central Bank Governing Council meeting last Thursday, officials did not modify its interest rate structure: a refinancing rate of zero percent flanked by a negative 0.40% deposit rate and a 0.25% marginal lending facility rate. Nor did the committee change the parameters of its asset purchase program that runs to December at […] More