Swiss Economicblogs.org
Financial stress is threatening the fragile euro area recovery, especially the credit cycle. More negative rates are likely to be part of the ECB’s response We expect the ECB to cut the deposit rate to -0.50% by June, probably in two steps (by 10bp in March and by another 10bp in June), as part of its response to weaker inflation prospects and tighter financial conditions. That said, the adverse consequences of negative rates are becoming increasingly visible as foreign central banks are...
Read More »Euro area: Revisiting the ECB’s Lower Bound
