Financial Pressure-bearing, the Policy of European Central Bank may Trends to Relax (II)

European Central Bank loose arrangements to replace interest rate expectations

The euro zone monetary policy that is facing the economic downturn is also receiving market’s attention. The European Central Bank will announce the latest interest rate decision on the 7th, which is expected to remain unchanged. President Draghi is concerned about the economic situation and monetary policy. According to the analysis of the article, the economic growth of Germany in the Eurozone ”locomotive” has stagnated. 6 inch mini electric scooter portable foldable for adult The manufacturing activity of the Eurozone in February has shrunk for the first time in more than five years. The pessimism has spread rapidly in the Eurozone. The European Central Bank must shoulder the heavy responsibility of regaining confidence.

In the near term, the prospect of providing a new round of stimulus to the Eurozone is clearly exciting. Most expect the ECB to at least suggest that low-interest loans will soon be offered. It is worth noting that the European Central Bank will release its economic forecast one day later than the OECD. The market generally expects it to be slightly reduced, because the euro zone is in a difficult position in Germany and Italy is in a recession. Judging from the words of the European Central Bank’s future chief economist Lian and the president’s potential candidate, the German central bank’s president, Weidmann, the ECB will not change the guidelines for interest rates to remain unchanged before the end of the summer.

The analysis said that the European Central Bank has just terminated an unprecedented stimulus plan and hinted that it will continue to promote the “normalization” of the policy and intends to withdraw the support measures introduced during the crisis. But some degree of policy reversal may not be avoided. “Exports are weakening, Britain’s withdrawal from the EU is coming, industrial production is declining,8 inch mini electric scooter portable foldable for adult and US President Trump is still considering tariffs on Europe’s huge auto industry. The European Central Bank may cut its economic forecast and expect it is difficult to reach inflation targets in a few years. This is enough to trigger policy action.”

It is widely believed that the first step for the ECB will be to provide banks with new long-term loans and extend a similar tool to maintain credit flows, but the ECB is not in a hurry to show all the cards. Since it is still hoped that the economic slowdown will only be temporary and will end in the summer, the ECB may suggest that support measures will be introduced and it will take some time to draw up the details. In the summer, it may be clearer whether the economy is recovering. In addition, according to the current complex economic situation, it is relatively easy to rule out the possibility of raising interest rates in 2019. The market has postponed the expected time for interest rate hikes to 2020, which may make the ECB’s guidance behinds the times. Forward-looking guidance adjustments will exceed the term of ECB President Draghi, and not all decision makers are willing to take a potentially controversial action.

 

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