ECB’s Lane: It takes time for monetary easing to impact and take effect

Source Fxstreet

European Central Bank (ECB) Chief Economist Phillip Lane is speaking at Goldman Sachs' Global Macro conference in Hong Kong on Wednesday.

Key quotes

Economy is still recovering.

Expect investment to pick up this year.

Eurozone economic growth 1.1% in 2024, expects a firmer economic recovery in 2025.

It takes time for monetary easing to impact and take effect.

Savings rate will come down in euro zone though not massively.

Expect strong employment and wage growth - will support consumption.

Market reaction

EUR/USD battles 1.0300 on these above comments, down 0.07% on the day.

ECB FAQs

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
XRP Price Finds Stability—Can It Turn Higher from Here?XRP price is moving higher from the $2.320 support zone. The price must clear the $2.50 and $2.52 levels to start a fresh increase in the near term. XRP price started a decent upward move from the
Author  NewsBTC
Yesterday 05: 16
XRP price is moving higher from the $2.320 support zone. The price must clear the $2.50 and $2.52 levels to start a fresh increase in the near term. XRP price started a decent upward move from the
placeholder
Elon Musk handed double loss in Trump and Altman court rulingsElon Musk was handed back-to-back losses with the latest developments in different legal proceedings with President Donald Trump and Sam Altman, the CEO of OpenAI.  President Donald Trump got a $10 million settlement out of his lawsuit against X for deplatforming him. Meanwhile, a judge found that Musk’s unofficial $97.4 billion bid for OpenAI contradicts […]
Author  Cryptopolitan
23 hours ago
Elon Musk was handed back-to-back losses with the latest developments in different legal proceedings with President Donald Trump and Sam Altman, the CEO of OpenAI.  President Donald Trump got a $10 million settlement out of his lawsuit against X for deplatforming him. Meanwhile, a judge found that Musk’s unofficial $97.4 billion bid for OpenAI contradicts […]
placeholder
Dogecoin Breakout Coming? Analyst Identifies Key Price LevelIn his latest technical breakdown posted on X, analyst Kevin (@Kev_Capital_TA) highlighted a pivotal threshold on Dogecoin’s daily chart. According to Kevin, reclaiming the $0.28 region on a weekly
Author  NewsBTC
6 hours ago
In his latest technical breakdown posted on X, analyst Kevin (@Kev_Capital_TA) highlighted a pivotal threshold on Dogecoin’s daily chart. According to Kevin, reclaiming the $0.28 region on a weekly
placeholder
Australian Dollar rises as Trump delays reciprocal tariffsThe Australian Dollar (AUD) strengthens for the second consecutive day on Friday, driven by US President Donald Trump’s decision to postpone the implementation of reciprocal tariffs.
Author  FXStreet
5 hours ago
The Australian Dollar (AUD) strengthens for the second consecutive day on Friday, driven by US President Donald Trump’s decision to postpone the implementation of reciprocal tariffs.
placeholder
200,000 New Investors Buy Ripple (XRP) 30-Days After Gensler’s Farewell: What Next for Stellar (XLM)? Ripple (XRP) price consolidated around $2.40 on Thursday, up 11% since Monday, technical indicators suggest Stellar (XLM) has joined the rally.
Author  FXStreet
5 hours ago
Ripple (XRP) price consolidated around $2.40 on Thursday, up 11% since Monday, technical indicators suggest Stellar (XLM) has joined the rally.
Related Instrument
goTop
quote