<\/p>\n
European Central Bank (ECB) Board member Isabel Schnabel\u00a0said on Friday that the central bank may cut interest rates in June, but policymakers\u00a0should look very carefully at the data because there is a risk of easing prematurely, per Reuters.\u00a0<\/p>\n
\n\u201cSays depending on incoming data rate cut in June may be appropriate but a path beyond June is much more uncertain.\u201d<\/p>\n
\u201cRecent data have confirmed that the last mile of disinflation is most difficult.\u201d<\/p>\n
\u201cBased on current data, a\u00a0rate cut in July does not seem warranted.\u201d<\/p>\n
\u201cWith inflation risks still being tilted to the upside, front-loading of easing process would come with a risk of easing prematurely.\u201d<\/p>\n
\u201cWe cannot pre-commit to any particular rate path due to\u00a0very\u00a0high uncertainty.\u201d<\/p>\n
\u201cIt’s\u00a0virtually impossible to quantify a change in the natural\u00a0rate of interest\u00a0in real-time with any reasonable degree of precision.\u201d<\/p>\n
\u201cThe closer we get to a potentially neutral level,\u00a0and this\u00a0could be well above 2%, we need to move even more cautiously.\u201d<\/p>\n
\u201c2% target has served us well, a\u00a0change in the target is\u00a0not appropriate.\u201d<\/p>\n
\u201cGeopolitical shocks are a key risk that we need to watch,\u00a0and this\u00a0poses upside risks to the inflation outlook.\u201d<\/p>\n
\u201cOver the longer run, geopolitical fragmentation would pose further upside risks to inflation by reducing the efficiency and reliability of global supply chains.\u201d<\/p>\n<\/blockquote>\n
Market reaction<\/strong><\/h2>\n
These comments have little to no market reaction to the Euro. The\u00a0EUR\/USD\u00a0pair\u00a0is trading\u00a0at 1.0861, losing\u00a0 0.06%\u00a0on the day.<\/p>\n
\n\n\nECB FAQs<\/h2>\n
\n\n The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.<\/p>\n<\/section>\n
\n In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets \u2013 usually government or corporate bonds \u2013 from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.<\/p>\n<\/section>\n
\n Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.<\/p>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
\u00a0<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
European Central Bank (ECB) Board member Isabel Schnabel\u00a0said on Friday that the central bank may cut interest rates in June, but policymakers\u00a0should look very carefully at the data because there is a risk of easing prematurely, per Reuters.\u00a0 Key quotes \u201cSays depending on incoming data rate cut in June may be appropriate but a path […]<\/p>\n","protected":false},"author":2,"featured_media":19346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[173],"tags":[201,248,386,251,246,257,825,255,684,250,333,252,247,253,249,256,254],"class_list":["post-303806","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-others","tag-blockchain","tag-bsc","tag-centralbanks","tag-chainlink","tag-coin","tag-cryptocurrency","tag-ecb","tag-gta","tag-interestrate","tag-looks-rare","tag-macroeconomics","tag-oracle","tag-polygon","tag-quickswap","tag-safe-moon","tag-wallet","tag-wordpress"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/303806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=303806"}],"version-history":[{"count":3,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/303806\/revisions"}],"predecessor-version":[{"id":303812,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/303806\/revisions\/303812"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/19346"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=303806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=303806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=303806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}