ECB To Continue With Low Rates For A Long Time
ECB chief economist, Philip Lane was making a few comments regarding the monetary policy in the Eurozone. he touched briefly inflation, credit growth and the monetary policy. Below are his comments:
- ECB cares
- Euro area credit growth continues to be decent
- Policy transmission is working
- Have not reached reversal rate yet
He said that he “cares equally about too low or too high inflation”, but i don’t think he and the ECB will have to worry about high inflation for a very long time. Inflation is expected to tick higher when the report comes out next week, both core and headline CPI (consumer price index) but it still remains very low.
Policy transmission is working, according to him, which means that the latest round of monetary easing, that they announced in September meeting is having a positive effect. I think that it’s too early to even mention it, since the ECB only restarted the QE programme this month. The reversal rate has not been reached yet, so that means that they will jeep negative rates for a long time and they might even cut further. The Euro is not minding much though, as EUR/USD remains stable.
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