Recent comments from the ECB suggest that there is still a central focus on inflaiton. The bank's inflation forecast for the next year will be aroud 3% which is higher than their target of 2%.
All of the central bank's talk is centered on a policy that will do everything to bring this number down to the target; consequently, we are not going to see any decline in rates over the near-term. Their creditability is intact, but it will come at a high price. Without lowering rates, there will be no help on the real economy from the ECB. The only way that rates will fall will be from a redcued demand pressure from a recession.
The Euroland economy is only going to further languish, so there is little reason to see any upset for equities or the euro over the near-term.
All of the central bank's talk is centered on a policy that will do everything to bring this number down to the target; consequently, we are not going to see any decline in rates over the near-term. Their creditability is intact, but it will come at a high price. Without lowering rates, there will be no help on the real economy from the ECB. The only way that rates will fall will be from a redcued demand pressure from a recession.
The Euroland economy is only going to further languish, so there is little reason to see any upset for equities or the euro over the near-term.
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