Divergence in ECB and Fed rate regimes will drive portfolio shifts

The big news today was the ECB’s decision to lower interest rates 10 basis points to 0.05% and its simultaneous decision to engage in a form of quantitative easing using the asset-backed market as a vehicle. While these measures are welcome, they will almost certainly not be enough on their own. But it will give some respite to a euro area on the brink of outright deflation.I have a few brief comments below.

The big news today was the ECB’s decision to lower interest rates 10 basis points to 0.05% and its simultaneous decision to engage in a form of quantitative easing using the asset-backed market as a vehicle. While these measures are welcome, they will almost certainly not be enough on their own. But it will give some respite to a euro area on the brink of outright deflation.I have a few brief comments below.
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