ECB’s Lane: Policies are ‘in good shape’ in current scenario – Bloomberg
|While speaking in an interview on Italy’s Sky TG24 during Saturday, the European Central Bank’s (ECB) Chief Economist Philip Lane said, as per the Bloomberg, that policies are “in good shape” for the baseline scenario of improving conditions over the next one or two years, but further rate cuts can’t be ruled out.
Key quotes
“Under the most likely scenario, we think the current policies are in good shape.”
“The scenarios where “more dramatic policies” are required such as “a severe negative shock, a big recession” are not the baseline case.”
“If it is necessary to put the rate lower, we will be prepared to do so.”
“It’s a very important message and this goes back to the wider discussion.”
“Of course, everyone agrees at some level the negative rate will not be helpful. But our assessment is we are not at that level now.”
“We do not find it acceptable to have inflation around 1.6%. So 1.6% is not close to 2%. That is important.”
“To argue that under zero circumstances there can be a sovereign debt restructuring is not plausible.”
FX implications
Although the news follows the ECB’s push to shift the market’s attention off further easy money policies, especially after the recent speech from the President Christine Lagarde, there was no major reaction to the headlines. The EUR/USD pair trades near 1.1020 by the press time of early Monday morning in Asia.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.