Europe's outlook "darkening," ECB head hedges on recession
The head of the European Central Bank says the economic outlook “is darkening” and she expects business activity to “slow substantially” in the coming months as high energy and food prices pushed up by the war in Ukraine sap consumer spending power.
Why the ECB Needs New Tools for Bond ‘Fragmentation’
The European Central Bank has sought to stave off the danger of a sovereign-debt storm with the promise of a new tool to curb market stress after Italian bond yields breached 4% on June 14, the highest since the market turmoil of 2014. Investors are viewing the renewed push to tackle so-called fragmentation as evidence policy makers will fight to prevent borrowing costs in the union from diverging excessively. That’s a dynamic that threatened to rip the euro-zone apart during the crisis a decadewashingtonpost.com
European Central Bank vows backstop against market turmoil
The European Central Bank has vowed to come up with a new, unspecified market backstop that could be used to buffer some countries against bond market turmoil similar to what shook the 19-country eurozone during a debt crisis more than a decade ago.
Powell reinforces expectations of sharp rate hike next month
The Federal Reserve must move faster than it has in the past to rein in high inflation, Chair Jerome Powell said, signaling that sharp interest rate increases are likely in the coming months, beginning at the Fed’s next policy meeting in May.
European Central Bank keeps pandemic support going
The European Central Bank has decided to keep its pandemic stimulus efforts unchanged even as consumer prices spike and central banks in other parts of the world look to dial back support as their economies bounce back from the worst of the COVID-19 outbreak.
Europe leaves stimulus running hot ahead of recovery
The European Central Bank is leaving its key pandemic support for the economy running full blast even as the economy shows signs of recovery thanks to lower virus cases and fewer restrictions on activity in the 19 countries that use the euro currency.
New challenge for the Powell Fed: A strengthening economy
The rise in the 10-year yield in recent weeks “caught my attention," Powell acknowledged earlier this month. AdIn anticipation of faster growth and inflation, investors have priced in at least three Fed rate hikes by 2023 — a much earlier lift-off than the Fed itself has forecast. Seeking to reassure investors, Fed officials have said they regard the rise in the 10-year yield as a positive sign, evidence that the financial markets expect the economy to steadily strengthen. As a consequence, Fed officials will likely boost their projections for economic growth for this year and for 2022, lower their estimates for unemployment and raise their expectations for inflation. Fed officials may project economic growth this year of as much as 5%, economists say, up from their December estimate of 4.2%.
Lagging US, Europe speeds up help for virus-hit economy
The rise in longer-term borrowing rates is regarded as a spillover from the U.S., where the economic recovery is expected to be faster. By contrast, the eurozone economy is not expected to recover until mid-2022, held back by a slow vaccine rollout and lower levels of government relief spending compared with the U.S. ECB President Christine Lagarde told a news conference that the rise in market borrowing rates, “if left unchecked, could translate into a premature tightening of financial conditions for all sectors of the economy. AdThe bond purchases have the effect of pushing down bond yields, which are used as benchmarks for borrowing across the region. Lagarde didn't specify an amount for the accelerated bond purchases.
European Central Bank stimulus on track as economy struggles
FRANKFURT – With more than a trillion euros in stimulus still in the pipeline to the economy, the European Central Bank left its key bond-purchase program unchanged Thursday as the 19-country eurozone endures a winter economic slowdown due to the pandemic. ECB President Christine Lagarde told a news conference that the economy likely contracted in the last three months of 2020 and the outlook going forward faces risks. The economy is being propped up by massive support from the ECB, national governments, and the EU. The European Union’s executive commission forecasts that the eurozone economy shrank 7.8% last year. Those are zero for short term loans from the ECB to banks, and minus 0.5% on deposits left overnight at the ECB by banks.