ECB minutes reveal rise in opposition to QE

Thursday, 10. October 2019 13:37

The European Central Bank's rate-setting panel agreed broadly at the meeting finished on September 12 that Eurozone countries "with fiscal space" should step in to counter economic headwinds. The minutes published on Thursday revealed substantial support for the subsequent decision to provide stimulus but the discussion seemed somewhat heated.

"A number of members" said buying €20 billion in assets per month is "not sufficiently strong" either due to the flatness of the yield curve or because they said it should be "an instrument of last resort." There were "a few" central bankers who proposed to cut the deposit rate by 20 points instead of ten and skip expanding the balance sheet. "A number of reservations were expressed" regarding tiering.

The ECB's Governing Council should decide according to own assessments and "not try to accommodate market expectations," unnamed participants warned. "Several" said the growth outlook was "too optimistic" even after revision. The document notes the "persistent rise in the price of gold" and how yields on more and more debt become negative.

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