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Draghi on Why the Euro Area Is Not Sliding into Deflation like Japan Did

June 3, 2014

History and economic history is full of rationalizations that “this time is different.”  So it seems to be with the ECB officials, who have defended their policy stance against accusations of the same over-complacency that the Bank of Japan showed in the 1990s as that economy slid gradually into price deflation.  For the record, the […] More

Euro Area Inflation Justifies More ECB Stimulus

March 4, 2014

Officials on the ECB Governing Council often assert that their’s is a policy that addresses the average economy of the whole bloc, not one or more of its component parts.  However, the revealed predisposition of the policymaking committee suggests that policy is directed primarily to inflation and prospective future inflation in Germany.  The central bank’s […] More

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January 9, 2013

Market participants are not anticipating more stimulus, but a rate cut or new unconventional support cannot be ruled out.  Indeed, a rate reduction was discussed widely at the December meeting, and the decision to keep the existing rate structure unchanged was not made unanimously.  New staff forecasts were adopted at the December meeting that certainly […] More

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June 5, 2012

The June meeting of the ECB Governing Council is being held on Wednesday rather than the customary Thursday.  This is an important meeting, coming a day after Group of Seven finance ministers are holding an impromptu discussion about how to defuse the latest turn for the worse in Europe’s banking and debt crisis and amid […] More

ECB Preview

February 8, 2012

The ECB interest rate announcement will be made Thursday at 12:45 GMT and be followed at 13:30 GMT by President Draghi’s fourth press conference.  Draghi has received good reviews for his communication and leadership skills at these monthly occurrences.  The ECB refinancing rate was cut by 25 basis points each in November and December but […] More

An Important ECB Press Conference Tomorrow

March 2, 2011

The ECB will not raise its 1.0% refinancing rate tomorrow, nor modify the deposit rate and marginal lending rate that symmetrically flank it at 0.25% and 1.75%.  A signal of an imminent tightening next month also seems doubtful.  The last rate change was made in May 2009.  Officials are expected to upgrade the inflation risk […] More