© Bloomberg. Visitors take in the city skyline view from the 15th floor pantry area inside the European Central Bank (ECB) headquarters as skyscrapers tower over commercial and residential property in Frankfurt, Germany, on Wednesday, Oct. 18, 2017. In a tweet with the hashtag #Brexit, Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein on Thursday hailed “great meetings” he had in Frankfurt and said he will spend a lot more time there.(Bloomberg) — The European Central Bank isn’t yet ready to change its language on when it might raise interest rates, but it’s getting close.
That’s why comments by chief economist Peter Praet this week might be significant. Speaking in Brussels, he dwelled on the importance of two particular words in the ECB’s policy statement: “expects” and “intended.”
The reason why his comments are relevant is because some policy makers are already said to be pushing for more clarity on how long borrowing costs will stay at their record lows once the bond-buying program stops.
Changing the language on rates to say the ECB “intends” to keep them at current levels for an extended period, rather than “expects” to, would be arguably a stronger guarantee that easy money won’t come to a sudden end.
Read more: Some ECB Officials Are Said to Urge Clearer Interest-Rate Signal
Praet said the current formulation on rates has been used “until now” — though he also wasn’t ready to say a change is imminent. Still, something to think about.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Source: Investing.com
