ECB To Continue With Low Rates For A Long Time

Reading into the ECB's Lane comments, they will likely keep negative rates for a long time and might even cut further

Skerdian Meta•Wednesday, November 27, 2019•1 min read

ECB chief economist, Philip Lane was making a few comments regarding the monetary policy in the Eurozone. he touched briefly inflation, credit growth and the monetary policy. Below are his comments:

ECB cares
Euro area credit growth continues to be decent
Policy transmission is working
Have not reached reversal rate yet

He said that he “cares equally about too low or too high inflation”, but i don’t think he and the ECB will have to worry about high inflation for a very long time. Inflation is expected to tick higher when the report comes out next week, both core and headline CPI (consumer price index) but it still remains very low.

Policy transmission is working, according to him, which means that the latest round of monetary easing, that they announced in September meeting is having a positive effect. I think that it’s too early to even mention it, since the ECB only restarted the QE programme this month. The reversal rate has not been reached yet, so that means that they will jeep negative rates for a long time and they might even cut further. The Euro is not minding much though, as EUR/USD remains stable.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.