"ECB Action: Just a Matter of Time?
The Managing Director of the IMF and the chief economist are making no bones about it. More action by the ECB is inevitable. It is "just a question of timing," says Lagarde and "sooner was better than later", chimed Blanchard, the chief economist.
The euro is firm, having trading above $1.39 briefly today, for the first time since March 19 and the backing up of US rates after the FOMC meeting and Yellen's faux pas of defining "a considerable period". EONIA remains elevated above 20 bp, about twice the year ago level (while effective Fed funds at at 8 bp, half of what they were a year ago). The rise in EONIA comes despite the rise in excess liquidity in the Eurosystem of more than 20 bln euros over the past week. "