A Lot Of Talk But Not Much Action
Skerdian Meta • 2 min read
Today is another day packed with speeches from central bank members. We have had quite a few of these days recently, haven´t we? They seem to enjoy all the fame and attention they get, especially the Americans obviously.
The ECB president Mario Draghi opened the day with a testimony at the German Bundestag. He made some comments which make sense, such as "Germany has fiscal space to spend", "The ECB monetary policy measures are starting to show positive effects" and "Everybody will benefit recovery and growth". The last one is only half true, everyone can benefit, but the question is how even it will spread between the ordinary Joe and the wealthy corporations/individuals.
There was a rumour where Draghi supposedly told German lawmakers that constant attacks on the ECB might force them to take even more extensive measures in order to be effective. Is that a threat? On our previous update, we explained the big issue the Germans have with low interest rates and loose monetary policy. Nothing has been confirmed so far so they remain just rumours for now.
His ECB colleague Villeroy later appeared live where he said that the European economy is levelling off. The problem is that it is not a good level to feel delightful when growth is near zero.
Now the US counterparts have occupied the media since early afternoon. From Yellen and Kashkari´s comments, you can feel that the FED has already come to terms with low inflation. They said that this is a global phenomenon now, so they must have accepted that low interest rates are here to stay for a long time. That means accepting failure in one of two mandates, employment and price stability. Now they will focus on employment only. The forex market seems hardly impressed by all this talk.