The ECB has moved toward forward guidance but they have been careful not to press too far ahead, I suspect because they wanted to get Weidmann on board. Here are two recent comments on ECB policy and some of my own.
First, Marc Chandler from last week when the ECB moved to forward guidance (emphasis added):
The ECB took an unprecedented step today. Part of its mantra has been that it does not pre-commit. Today it did. It indicated interest rates will be the same or lower for an extended period of time. Draghi, when pressed, chose not to define extended period, except to note that it does not mean six or twelve months.
Sometimes ECB officials are surprised by the market’s reaction, but not today. Interest rates fell. The implied yield on next year’s Euribor futures contracts fell 8-11 bp, ...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.