Market news
23.04.2019, 06:00

ECB governing council member Coeure: Negative interest rates are not the biggest problem

  • Banks should rather focus on costs instead

  • Don't see any monetary policy reason for tiered interest rates, but need to watch this issue closely

  • Economic growth will return in 2H 2019 if trade conflict is resolved

  • Missing transmission from wage costs to consumer prices is a bit puzzling

  • Businesses are apparently accepting narrower profit margins

  • But that cannot go on forever, at some point they will raise prices

  • Choice of next ECB president should be based on competence, not nationality

  • ECB does not expect a recession, but it is true that economic slowdown in Germany is stronger than expected

  • markets pricing in a rate hike by the ECB only in late 2020 is reflective of a different assessment shared by the governing council with regards to downside risks faced by the Eurozone.

  • Central bank values these expectations/pricing as an important input but they are not led by them.

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