NATO War Planning -- In 2021 Ukraine | 68 comments (68 topical, editorial, 0 hidden)

ECB Monetary Policy and Price Stability (none / 0)

The first twenty years of the European Central Bank: monetary policy
On 1 June 2018 the ECB celebrated its 20th anniversary. This paper provides a comprehensive view of the ECB's monetary policy over these two decades.
One of the main themes of the paper is how ECB monetary policy responded to the challenges posed by the European twin crises and the subsequent slow economic recovery, making use of its relatively wide range of instruments, defining new ones where necessary and developing the strategic underpinnings of its policy framework.
This paper reviews the European Central Bank's monetary policy during its first twenty years of existence. Overall, the ECB has delivered on its price stability mandate despite the very challenging crisis times of the last decade. Average inflation over this period has been 1.7 percent, which is in line with the ECB's aim of maintaining inflation below but close to 2 percent over the medium term. However, this average number masks quite stable inflation around 2 percent before the outbreak of the financial and sovereign debt crisis and a much more volatile and on average lower inflation rate around 1.5 percent thereafter. Throughout the whole twenty years, average five-year ahead inflation expectations, as captured by the Survey of Professional Forecasters, have remained stable within a narrow range between 1.8 and 2.0 percent, underlining the ECB's credibility.

'Sapere aude'

by Oui (Oui) on Tue May 31st, 2022 at 01:18:17 PM EST

Re: ECB Monetary Policy and Price Stability (none / 0)

Normalising monetary policy in non-normal times | ECB |
Following the acute phase of the pandemic, central banks in most advanced economies have started to withdraw stimulus as the recovery has progressed and inflationary pressures have emerged. In the jargon of central bankers, this process is often described as bringing about a "normalisation" of monetary policy.
We are not, however, in normal times.
Unlike some other advanced economies, the euro area is not facing a situation of excess domestic demand. As ECB President Christine Lagarde recently noted, "consumption and investment remain below their pre-crisis levels, and even further below their pre-crisis trends".
Instead, the euro area is confronted with a war on its doorstep that comes on top of a series of negative supply shocks generated abroad. These shocks - above all the increase in energy prices - are creating sizeable and persistent upward pressures on near-term inflation. But by hitting real incomes, confidence and ultimately domestic demand, these shocks could derail the post-pandemic recovery.
In other words, the very shocks that have led to a surge in inflation are also depressing output. As a result, the inflation path is starting from a much higher point but the medium-term inflation outlook is characterised by high uncertainty.

Euro zone inflation hits yet another record high as food and energy prices soar | CNBC |

'Sapere aude'

by Oui (Oui) on Tue May 31st, 2022 at 01:18:56 PM EST
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Re: ECB Monetary Policy and Price Stability (none / 0)

Inflation is a concern for many euro area citizens at the moment, I explained to @aagalloni at #ReutersNext.

But we are confident that it will decline over the course of 2022. pic.twitter.com/s2MtzcDsnc
— Christine Lagarde (@Lagarde) December 3, 2021

'Sapere aude'

by Oui (Oui) on Tue May 31st, 2022 at 01:19:27 PM EST
[ Parent ]

Re: ECB Monetary Policy and Price Stability (none / 0)

As the expected interest rate lift-off date draws closer, it gets more important to clarify the policy normalisation path ahead - especially given the complex environment that we are facing. Read my #ECBBlog "Monetary policy normalisation in the euro area" [_link] pic.twitter.com/PA4ptxJ2Ud
— Christine Lagarde (@Lagarde) May 23, 2022

'Sapere aude'

by Oui (Oui) on Tue May 31st, 2022 at 01:20:25 PM EST
[ Parent ]

Re: ECB Monetary Policy and Price Stability (none / 0)

The savings rate falls to 4.4%, the lowest since Sept 2008.

That large pool of savings "is getting eaten up .. For all the 'consumers have great balance sheets' talk, the flow of income vs spending continues to shrink."

- @pboockvar pic.twitter.com/mA1THOH1Zz
— Carl Quintanilla (@carlquintanilla) May 27, 2022

'Sapere aude'

by Oui (Oui) on Tue May 31st, 2022 at 01:21:24 PM EST
[ Parent ]

NATO War Planning -- In 2021 Ukraine | 68 comments (68 topical, 0 editorial, 0 hidden)