ECB in no hurry to exit its extraordinary policies - BBH
|Analysts at BBH point out that the ECB made it clear last week that it is no hurry to exit its extraordinary policies as it is not convinced that inflation has yet to enter a sustainable and durable path.
Key Quotes
“This suggests that the ECB’s balance sheet is likely to expand by more and for longer than may be appreciated by market participants, many of whom are concerned that the ECB will run out of assets it can buy under the current self-imposed rules.”
“If the ECB were to cut its purchases in half to 30 bln euros in the first half of next year, the balance sheet would expand by another 180 bln euro by the end of June 2018. This after expanding by 180 bln euros in Q4 17. If the Fed begins its balance sheet operations in October, by the end of June 2018, its balance sheet would shrink by $180 bln. The ECB also reiterated that it will not raise rate (deposit rate at minus 40 bp and refi rate is at zero) until after its asset purchases are complete.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.