Central Banks latest publications
At its meeting last Thursday, the European Central Bank (ECB) launched a comprehensive package of easing measures, as Draghi had—for all intents and purposes—been signaling over recent months (in his speech at Sintra and, most significantly, at July's monetary policy meeting).
The central bank came in line with what we were expecting announcing a strong package of further accommodative measures. It enhanced the forward guidance on rates, cut the depo rate by 10bps, announced a two-tier system for bank reserves and a new open-ended asset purchase program (APP) and sweetened TLTRO-III conditions.
Despite the apparent calm of recent days, the underlying elements of recent tensions in financial markets continue to cause concern for several reasons.
In the shadow of the spectacular Teton Mountains in Jackson Hole, Wyoming, the Federal Reserve Bank of Kansas City held its forty-third Economic Policy Symposium from August 22 to 24. This year, a decade on from the Great Recession, the discussion focused on "Challenges for Monetary Policy."
Last week, the annual economic policy symposium was held in Jackson Hole. This year's theme was the challenges for monetary policy. Although fiscal policy was not the subject of debate, it cast a shadow over the event.
Models suggest 70% probability of recession within 24 months. Increased weakness in global growth. Policy uncertainty whipsawing with trade tensions. At times, key financial markets showing signs of panic-like conditions.
Economic data and news this summer in Europe are disappointing; especially for the signs of vulnerability of the more open economies following the slight fall in production in Germany and the fading expectations that the main risks would diminish in the second half of the year.