ECB kicking the QE can down the road – RBS
FXStreet (Guatemala) – RBS strategists explained in their opinion that the ECB are kicking the QE strategy down the road.
“Members of the Governing Council may have hoped that by announcing a large package of measures in June they would have bought themselves six or even nine month’s grace to evaluate the cumulative impact of that package before the clamour for more action – and in particular QE – resumed”.
“The fact that the Council decided not to conduct the first two TLTRO operations until September and December, which in turn appears to have forced the Council to take the uncomfortable decision on the SMP drain to create a bridge between then and now is consistent with that ‘kick the QE can down the road’ strategy”.
“It always seemed likely that the ‘everything, all at once’ June package would have precisely the opposite effect – raising expectations of QE. The question was how the Council would respond to that pressure: to questions about the likelihood, timing and design of QE”.
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