Gilles Möec (chief economist at AXA IM) | In our view, the ECB’s narrative lacks consistency at the moment. Most of the members of the Governing Council who have expressed themselves called for more fiscal stimulus. This was evident again in Bank of Spain Governor De Cos’ speech last weekend. We agree with that. But if even central bankers now consider that the fiscal leg of economic policy should take the lead, while they also recognize that additional monetary stimulus can come with adverse effects – to the point that another deposit rate cut must be “mitigated” – then the question of whether the monetary push is going to be a net positive arises.
Some experts analyse the impact of the first almost 6 months since the ECB announced the launch of its ‘quantitative easing’.
MADRID | The Corner | The European weak economic growth increases the pressure on the ECB to take additional measures or the long-awaited QE to boost growth, beyond those already announced in June and of which the effects probably will not be seen until 2015. At the moment the ECB in its monthly report reemphasized that there is “a continued moderate and uneven recovery of the euro area economy”, with low inflation rates and a weak monetary and credit evolution. At the same time, inflation expectations for the euro area in the medium and long term remain firmly anchored in line with the ECB’s target of keeping the inflation rates at levels below but close to 2%.
By Peter Wong via Caixin | It is unlikely that the RMB or yuan, China’s “people’s currency,” will replace the dollar outright as the world’s only investment and reserve currency any time in the foreseeable future. But there is every indication that the dollar will have to make room for a second global reserve currency within the next 15 years. A revolution allowing investors to diversify risk – and creating a system with more choice and better ability to resist shocks – should be welcomed.
WASHINGTON | By Pablo Pardo | Last week, the Federal Reserve’s decision to keep bond purchases at the current level was received with some degree of hysteria by the financial markets. These are, of course, the same financial markets that had decided to ignore the subpar US labor market performance in August, the extremely low inflation rate and, in general, the moderate pace of the US recovery.