ECB Rate Cut Would Be ‘Rather Cosmetic,’ Stark Writes in FAZ
2014-06-03 00:32:30.737 GMT
By Jan Dahinten
June 3 (Bloomberg) -- Possible interest rate cut by
0.1-0.15 ppts would have little impact as rate tool has been
exhausted, former ECB chief economist Juergen Stark writes in
today’s Frankfurter Allgemeine Zeitung.
* No investment decision would depend on such a small rate
change, making the step “rather cosmetic in nature”
* Euro exchange rate is “certainly not” a reason to further
loosen monetary policy as FX rate is only relevant to
monetary policy if it has significant impact on price
developments
* Euro strength is “a temporary phenomenon” that will
regress with change in U.S. monetary policy
* Currently no danger of deflation and significantly falling
prices in euro zone
* Euro-zone inflation of 0.7% “means price stability,” all
other interpretations are misleading; low rate of inflation
mainly a result of significant drop in prices of oil and
commodities
* Monetary policy focused on medium term should ride out the
current trough in inflation rather than stoke expectations
of quantitative easing
For full text click here (in German)
For Related News and Information:
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First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Jan Dahinten in Singapore at +65-6212-1164 or
jdahinten@bloomberg.net
To contact the editor responsible for this story:
Jan Dahinten at +65-6212-1164 or
jdahinten@bloomberg.net
2014-06-03 00:32:30.737 GMT
By Jan Dahinten
June 3 (Bloomberg) -- Possible interest rate cut by
0.1-0.15 ppts would have little impact as rate tool has been
exhausted, former ECB chief economist Juergen Stark writes in
today’s Frankfurter Allgemeine Zeitung.
* No investment decision would depend on such a small rate
change, making the step “rather cosmetic in nature”
* Euro exchange rate is “certainly not” a reason to further
loosen monetary policy as FX rate is only relevant to
monetary policy if it has significant impact on price
developments
* Euro strength is “a temporary phenomenon” that will
regress with change in U.S. monetary policy
* Currently no danger of deflation and significantly falling
prices in euro zone
* Euro-zone inflation of 0.7% “means price stability,” all
other interpretations are misleading; low rate of inflation
mainly a result of significant drop in prices of oil and
commodities
* Monetary policy focused on medium term should ride out the
current trough in inflation rather than stoke expectations
of quantitative easing
For full text click here (in German)
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Jan Dahinten in Singapore at +65-6212-1164 or
jdahinten@bloomberg.net
To contact the editor responsible for this story:
Jan Dahinten at +65-6212-1164 or
jdahinten@bloomberg.net