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Bloomberg (March 2)

2024/ 03/ 03 by jd in Global News

“European Central Bank officials confronting faster-than-expected inflation might also wonder if this is just the last stumble before their 2% target looms large. While the 2.6% outcome for February released on Friday — and a still-stubborn 3.1% result for the so-called core measure — present grounds for caution, the downward momentum in consumer prices is getting harder to ignore.”

 

Financial Times (January 9)

2024/ 01/ 09 by jd in Global News

“Unemployment in the eurozone fell back to a record low of 6.4 per cent in November, defying recent economic gloom after the number of jobless people fell almost 100,000 from a month earlier.” With the job market “proving more resilient than expected,” the ECB may worry more “about the timing of a potential cut in interest rates” as “rapid wage growth could keep price pressures elevated.”

 

Financial Times (December 16)

2023/ 12/ 17 by jd in Global News

“European bonds rallied on Friday, pushing yields to nine-month lows as investors focused on the latest signs of a slowing economy and shrugged off the European Central Bank’s insistence that it was not considering interest rate cuts.” Given the Fed’s pivot, markets appear skeptical of “ECB president Christine Lagarde’s insistence on Thursday that it was too soon to talk about the timing of rate cuts and that the bank had ‘more work to be done’ in its battle to tame inflation.”

 

Bloomberg (June 17)

2023/ 06/ 18 by jd in Global News

“European central bankers’ price stability mission is on a collision course with the goal of combating climate change, unless they change their ways.” Ultimately, the ECB may have to institute a special category of green lending to solve what appears to be an irresolvable dilemma. “The transition to a lower-carbon economy may fuel inflation — but raising interest rates in response to that could hinder investment in cleaner energy. So monetary policy and efforts to save the planet risk working against each other, casting a shadow over the prevailing consumer-price-targeting philosophy of the past three decades.”

 

Bloomberg (May 12)

2023/ 05/ 13 by jd in Global News

“The euro short-term rate, or ESTR, is currently 10.5 basis points below the central bank’s deposit rate, which is at its highest in 15 years. That’s close to the biggest gap on record…. It’s a sign the ECB’s aggressive rate hikes aren’t rippling out to banks and the economy, making it much harder for the central bank to meet its 2% inflation target.”

 

Investment Week (May 10)

2023/ 05/ 10 by jd in Global News

“The Bank of England is widely expected to make a 25 basis points hike tomorrow (11 May) as inflation remains stickily in the double digits, despite record rises in interest rates over the past two years. The move would come in the wake of similar decisions from the Federal Reserve and European Central Bank last week.” Looking ahead, a rate cut seems more likely from the Fed, with analysts “split on the path forward for the BoE following the presumed 25bps hike, with much depending on economic data released over the next few months.”

 

Reuters (March 17)

2023/ 03/ 19 by jd in Global News

“Investors held tight to bets that banking jitters would rein in the ECB’s ability to jack up borrowing costs again in the months ahead, as the central bank delivered a large rate hike on Thursday but wouldn’t signal future moves given an uncertain outlook.”

 

Reuters (March 1)

2023/ 03/ 02 by jd in Global News

“Strong investor inflows into bond markets this year mean traders and bankers are confident the European Central Bank will have a smooth start to unwinding its huge bond holdings, but the long term impact of its ‘quantitative tightening’ is a big unknown.”

 

Reuters (December 16)

2022/ 12/ 18 by jd in Global News

“The euro zone will soon have to pay for a decade of European Central Bank largesse. Rising interest rates are turning the ECB’s portfolio of bonds acquired since 2014 into a money-losing machine. The question of how those losses are shared could become a major source of tension between member states.”

 

Financial Times (April 22)

2020/ 04/ 23 by jd in Global News

“The collapse of the eurozone would be a catastrophe. The ECB is the one institution able and willing to act. Governments should back it.”

 

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