Thursday, March 10, 2016

European Central Bank bazooka and bomb shell

That is what they are calling the European Central Bank doing:

Deposit rate for banks -.4%
Reduced all short term lending rates
Increased QE

It is way too early to really make a judgment on the European Central Bank changes.  But my guess is the Federal Reserve Bank is watching with great interest how markets view these policy enhancements.

The knee jerk reaction to European and US equity markets was very positive.  Then it turned around.  Just before this (January 29) the Japanese Central Bank going officially rate negative caused the Nikki to head south.  It will be interesting to see how this turns out and what the Fed is going to do.

Me?  It looks like desperation.

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