It currently pledges that interest rates will remain at current “or lower” levels until inflation is entrenched back at the target.“Under the assumption of a gradual, though modest, recovery in economic growth, we think the bar for another rate cut or a step up of asset purchases is currently high,” said Barclays economists Philippe Gudin and Christian Keller.Economists expect ECB to keep outlook largely unchangedSource: Bloomberg survey of economists conducted Nov. 29 to Dec. 5Note: Chart shows September ECB staff projectionsBond purchases will most likely continue until late 2021, according to survey respondents. The ECB's decision infuriated US President Donald Trump, who urged the Fed to aggressively cut interest rates below zero earlier this week.
Welcome to the live blog – 15 minutes to go before the ECB’s rate decision and anticipation is high. The European Central Bank is done with cutting interest rates despite ... QE was at the heart of the dissent over September’s decision. With aid expiring, the White House offered a short-term extension Thursday of a $600 weekly unemployment benefit that has helped keep families and the economy afloat during the COVID-19 pandemic, but Democrats rejected it, saying President Donald Trump’s team failed to grasp the severity of the crisis.Steven Goldstein is based in London and responsible for MarketWatch's coverage of financial markets in Europe, with a particular focus on global macro and commodities. They don’t foresee the monthly pace of 20 billion euros ($22 billion) changing until one month before completion of the program, nor are new asset classes such as equities likely to be added to the mix.
A majority expect the Governing Council to agree to flexibility around the inflation goal, allowing price growth to overshoot or undershoot for a while.They were split on whether the current target of “below, but close to, 2%” will be tightened. Rabobank economists Bas van Geffen and Elwin de Groot don’t expect the ECB to set any specific targets, though they could eventually exclude the bonds of polluters from QE “in an attempt to win over some of the general public.”The morning of Lagarde’s policy meeting will also reveal how banks are responding to the ECB’s program of three-year loans, with the takeup of the second round of offerings.
The ECB will announce its decision at 1:45 p.m. local time (7:45 a.m. Eastern), followed by a news conference with President Mario Draghi at 2:30 p.m. Economists at … Markets are no longer pricing a rate cut next year.Economists in the survey expect the Governing Council to change its guidance on future policy by September. In a news conference following the decision, Draghi said stubbornly low inflation, which remains well below the ECB’s target of near but just below 2%, was the main driver for the decision. Markets lift amid rate cut. “This is certainly not an environment to pile something on top after the implementation of the last program.”The last program was a package of measures in September, weeks before Mario Draghi handed the presidency to Lagarde. No data available for survey round ahead of July 2019 ECB meeting.Respondents said Lagarde’s strategy review will be announced by January -- a significant minority think it will happen next week -- but their expectations are modest. She and some of her colleagues have tried to temper expectations, saying price stability remains the key objective.The survey suggests that climate won’t become a factor in setting monetary policy over the next 12 months. The latest data, from August, shows inflation running a full percentage point below its target of nearly 2%. Economists now see the next move as a rate hike by the first quarter of 2022.Lagarde, who holds her first policy meeting on Dec. 12, is facing mounting pressure from banks and politicians who say subzero rates are damaging the financial system and hurting savers. The European Central Bank is done with cutting interest rates despite persistent downside risks to growth, according to a Bloomberg survey of economists.With officials increasingly concerned about the impact of negative rates and President Christine Lagarde about to announce a strategic review, most respondents said monetary policy is on autopilot for the next two years. At the same time, the eurozone economy is just limping along, with year-over-year growth of 1.1% in the second quarter.Here’s a look at what banks are expecting out of the ECB.The yield on the 10-year bund That’s a turnaround from the previous survey which predicted more easing in June. It suggests her review will have to investigate other ways of using the ECB’s toolkit to revive inflation.“We don’t think they are going to ease, but if they were going to ease the pressure to do something else rather than cut rates is going to be quite high,” said Peter Schaffrik, a global macro strategist at RBC in London. Respondents predict demand will be 120 billion euros.
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ecb rate decision