The minutes released by the FED and the ECB last week shared concern about how to inform about their monetary stance. They fear unsettling the markets should investors wrongly interpret the messages conveyed to them. When you lack a clear policy perspective, the best thing you can do is to manage communication in a fairly tight way.
ECB inflation target
José Luis M. Campuzano (Spanish Banking Association) |The ECB believes the net effect of a policy of zero interest rates (negative in the case of the deposit rate) has been positive for the revenues of the different economic players. But the impact has not been equal.
We need to analyse what the “inflation triggers” are at the moment, beginning with those related to the domestic environment. In this case, key factors are salaries and what’s happening with prices.
J. L. M. Campuzano (Spanish Banking Association) | Stable inflation centred around levels of 2.0%…A scenario dominated by rising inflation is as complicated as one where deflation and potential low economic growth can create a vicious circle difficult to exit. Especially in a context of high indebtedness.
Fernando Barciela | The central bank has put QE in place, a trillion euros asset purchase programme, but inflation has returned to negative territory. Has the ECB’s strategy failed? Are critics right when they say it does too little, too late.