ECB Europe

Comment on the latest ECB council meeting

The ECB has to strike a delicate balance between preparing markets for an exit from QE and keeping its options open to extend its QE program further, if need be. The most difficult challenge for the ECB is that it is still not sufficiently fulfilling its price stability mandate despite a stronger than expected euro area recovery. The stronger Euro, which is pushing down inflation, does not make life any easier for the central bank.

After today’s press conference, an … [continue reading]

Read more
Business Cycles, Growth, Economic Structure Currency and Financial Markets ECB Europe Macroeconomics Monetary Policy

Statement on Today’s Decisions of ECB’s Governing Council 09/03/2015

The European Central Bank decision to stay course does not come as a surprise. The weaker projected inflation and growth figures were expected. The ECB is caught in a difficult dilemma: with its projections, the ECB admits that it will miss its price stability objective over the medium term. But it is wise for the ECB to follow a wait-and-see strategy. Global uncertainty has risen and is very high. The biggest concern for the ECB is not China or the … [continue reading]

Read more
Economic Policy Monetary Policy

ECB Projections for Growth and Inflation Very Optimistic – Downside Risks to the Euro Area Still Significant

Comment on the ECB Monetary Policy Decisions (5 March 2015):

The new ECB projections for growth and the return to price stability are very optimistic. The ECB projections are based on probably too optimistic expectations about the effectiveness of its QE programme. The weak euro and the decline in government bond yields over the past few months are largely the result of the high expectations about the QE programme. It is unlikely that the QE programme will continue to exert … [continue reading]

Read more