ECB monetary policy

Some Central Bank Developments and a Displeasing U.S. Labor Market Development

July 22, 2021

New U.S. jobless insurance claims last week totaled 419K, 51k greater than in the prior week, roughly 70k above street expectations, and the most in nine weeks. The news dampened the stock market euphoria of recent sessions. The dollar is little changed from its closing Wednesday levels, with dips of 0.1% against the euro, yen […] More

ECB Makes Several Policy Changes in More Aggressive Attempt to Lift Inflation Closer to Target

March 10, 2016

European Monetary Bank officials were intent on not making the mistake of December when the previous loosening of the policy stance underwhelmed markets for its timidity.  The goals of today’s more forceful stimulus are explained in the statement from President Mario Draghi. This comprehensive package will exploit the synergies between the different instruments and has […] More

European Central Bank Policymakers Pull the Trigger on Quantitative Easing

January 22, 2015

The ECB today announced a decision to begin buying in March sovereign and private-sector bonds at a pace of EUR 60 billion per month.  Officials took this controversial action, not favored by all, in response to lower-than-expected inflation, weaker-than-desired money and credit growth following earlier initiatives including long-term loans of cheap credit to banks, an […] More

More Stimulus from the European Central Bank

September 4, 2014

The ECB Governing Council delivered more stimulus than anticipated today. Its three interest rates were each cut by 10 basis points.  The new 0.05% refinancing rate will be flanked symmetrically by a negative 0.2% deposit rate and a marginal lending facility rate of 0.3%.  All of these are record lows. Markets were reminded that previously […] More

ECB Seeks More Information before Taking Any Action

February 6, 2014

The European Central Bank Governing Council did not ease policy as some market players were expecting and others hoping.  It did not back away from its macroeconomic outlook and its forward guidance. Officials expect “a prolonged period of low inflation, to be followed by a gradual upward movement towards inflation rates below, but close to, […] More

The ECB’s Surprise Rate Cut

November 7, 2013

In a surprise to private ECB watchers, the Governing Council cut both the refinancing rate and the marginal lending rate to 0.25% and 0.75%, respectively, while leaving its deposit rate at zero.  At today’s press conference, President Draghi denied that the decision was a response to the euro’s external level, asserting that policymakers acted in […] More

European Central Bank: No Change

October 2, 2013

The monthly meeting of the ECB Governing Council was held in Paris this month and on the first Wednesday, rather than first Thursday of the month because of a German holiday tomorrow. Council members engaged in a discussion of whether to reduce interest rates but by consensus majority elected again not to do so.  A […] More

ECB Introduces a New Communications Strategy with Some Forward Guidance

July 4, 2013

The three ECB rates of a zero deposit rate, a 0.5% refinancing rate, and a 1.0% marginal lending rate were left unchanged as expected.  The vote was unanimous after an extensive discussion of the merits and arguments of implementing a rate reduction now.  Officials acknowledged that monetary conditions had nonetheless tightened in certain ways since […] More