The normalization of monetary policy in the ECB continues to slow down

Mar 21, 2018 1:40:32 PM

but by key data can be seen, the inflation rate in the euro zone action is still insufficient, with a view, which will support the European Central Bank is slowly easing monetary policy exit, the end of large-scale asset purchase plan still need to slowly.

the recent, "top" position has been preempted "high hand" non American president Trump. The decision to formally sign high tariffs on imported steel and aluminum has led to a surge in uncertainty in the global market. Another important meeting on the other side of the ocean was again surprised by the market. After the news, the European Central Bank earlier in 2018 to adjust monetary policy wording, but monetary policy meeting minutes show that in January, the European Central Bank members believe that the current adjustment of the forward-looking guidance too early, this statement is to look forward to and explore the European Central Bank's policy adjustment path of investors "poured a pot of cold water" at the same time, it also makes some economists lowered for the European Central Bank to adjust monetary policy meeting in March on the wording of the expected. However, Delagi, the head of the European Central Bank, who did not go out of the way, made the market "surprise" again.

before the ECB monetary policy meeting held in March, and announced in a statement after the meeting, to maintain the current main refinancing rate, the overnight lending rate of 0.25% and zero negative deposit rate unchanged at 0.4%. At the same time, announced to maintain the size of the monthly purchase debt of 30 billion euros unchanged, continued until September of this year; and that if there is a need to extend the time, or the purchase of debt, the European central bank until the CMC saw inflation target level of continuous adjustment, this series of statements in line with market expectations.

but it is worth noting that the ECB stated in this monetary policy conference that interest rates will remain at the current level for quite a long time and will exceed the time limit for buying bonds. However, the European Central Bank has always been cautious, but beyond all expectations had been deleting appear in the statement "when necessary to expand the monthly bond purchases" policy wording, the analyst will change the interpretation of the wording of the European Central Bank, in an attempt to avoid excessive risk to the normalization of monetary policy in a small step.

in fact, in EuropeOn the premise of sustained economic recovery in the yuan region, the promise of abandoning the "necessary expansion of the monthly bond purchase scale" seems to be justified. Delagi said that the adjustment of the wording of the quantitative easing policy was a "retrospective nature" decision and was not suggestive of the future. However, when global trade protectionism is on the rise again, it is also confident that the ECB will make changes in its policy wording when faced with important uncertainties. And the confidence, either from ECB officials, is optimistic about the future of the eurozone's future economic recovery.

Eurostat recently released data show that the seasonally adjusted euro zone 2017 fourth quarter GDP growth of 0.6%, an increase of 2.7%. And looking back on the overall performance in 2017, the euro area GDP increased by 2.3%, while the euro zone GDP growth was only 1.8% in 2016. "The latest economic data and the results of the survey show that the strong and broad-based growth momentum of the eurozone is still continuing." Delagi said. At the same time, according to the European Central Bank official forecasts, 2018 eurozone annual real GDP growth rate will reach 2.4%, while in 2019 and 2020 were 1.9% and 1.7%, which means that, compared with December of last year, the European Central Bank will this year the euro zone economic growth forecast raised slightly, while maintaining the 2019 and 2020 is expected to remain unchanged. The

euro area economic growth momentum is very gratifying for the European Central Bank, but at the same time, Delagi can not ignore the weak inflation rate. Eurostat announced on the data show that in February the euro zone HICP (HICP) value rose 1.1%, lower than 1.3% in January, far below the ECB's target of 2%, while the index in February 2017 was 2%. From the key data, we can see that the euro area's inflation rate is still insufficient. It is believed that this will support the European Central Bank's withdrawal from loose monetary policy at a very slow pace, and the plan to end large-scale asset purchase still needs to take its time.

Delagi believes that the core inflation index of the euro area is still low, and has yet to show convincing and sustained signs of recovery. HICP is expected to be 1.4% in 2018, 1.4% in 2019 and 1.7% in 2020, respectively. The European Central Bank, said in an interview with the Reuters smets, the inflation pressure is not the case, the European Central Bank hasn't even started to discuss the modification of its monetary policy framework or so-called forward-looking guidance, this is because the current policy framework for the euro zone.

in fact, in addition to the still sluggish inflation rate,What makes Delagi Zaoxin thing, that is the threat of trade protectionism. Delagi, speaking at a news conference after the March monetary policy conference, said that from the current situation, the direct impact of tariffs on steel and aluminum is relatively small, but if other countries take retaliatory measures, the impact will be bigger. As a matter of fact, when the news of the US's high tariffs has just been released, the European Union has already demonstrated its strong opposition and has strongly indicated that if the US insists on its own way, it will take retaliatory measures. According to the calculations of UBS economists, steel exports account for only 1.4% of the euro area's exports to the US, but there is still a danger of greater risk escalation.

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