Draghi’s QE-gun fires blanks despite an increase to €80B, matched with deposit and interest rate cuts, to -0.4% and 0.05% respectively.
What this means?
Structural measures and reforms aside, the ECB seems to be nearing end of its rope and saw Draghi fit to take a passive-aggressive swing at policymakers, saying “we don’t anticipate that it will be necessary to reduce rates further.” Of course, with the resultant market turmoil and non-existent fiscal support from Eurozone politicians – will Draghi’s efforts to push up economic growth continue to be nominal (at best)?
To round off the week:
ECB needs a monetary policy for the people: Paul Mason (@paulmasonnews) cuts right to the case, examining the transmission mechanisms from bottom up. The observations challenge idealisms of growth to its very core, as the costs of institutional inflexibility and EU member state sentiments diverge.
The Big Cash Drop: Insightful comments from Rani (@ranimolla) and Lisa (@LisaAbramowicz) that lend a more forgiving overview, on Mario Draghi’s commitment to propping up the EU that seems targeted to improve insurance against financial debt losses.
The real economy and markets are so far apart they look like “two parallel realities”: Bob Bryan (narrows in on a note from Western Asset Management, which gives a more holistic overview of the implications of divergence in line with the Fed schedule and tighter lending conditions.
Is the Perfect Storm over for Markets? Mohamed A. El-Erian (@elerianm) and his commentary bring the coverage on ECB policies full circle, pushing for an (overdue) policy handoff that aligns with the shift towards global policy coordination.
Who Gets The Blame For The Slowing Economy?: A good roundup of the challenges impacting markets, veteran Steven Rattner (@SteveRattner) goes beyond examining financial institutions and governments – covering the influences on decision-making sentiment and leadership divergences.