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ForennameÖsterreichische Aktien im In- und Ausland
Betreff des ThemasLowest ECB forecasts on record but a steady start for Lagarde
URL des Themashttps://aktien-portal.at/forum/../forum/boerse-aktien.php?az=show_topic&forum=124&topic_id=203844&mesg_id=212740
212740, Lowest ECB forecasts on record but a steady start for Lagarde
Eingetragen von Warren Buffett, 12.12.19 17:48
Lowest ECB forecasts on record but a steady start for Lagarde

As expected, Christine Lagarde delivered a message that the Governing Council is fully committed to the existing mix of policies on interest rates, forward guidance and QE. This made her first ECB Press Conference devoid of controversy or surprise, and for the markets, brought an hour of Q&A that barely led to a collective raised eyebrow – undoubtedly just as she would have scripted it.

There were, however, some inconsistencies in presentation in our view. For example, the relatively more optimistic tone of the opening statement didn’t match the ECB’s new macro forecasts which are toward the lower end of expectations in terms of where growth and inflation are likely to end up over the coming years. So, for instance, back in September the ECB was pencilling in core inflation at 1.2% in 2020 and 1.5% in 2021; now the 2020 figure stands at 1.3%, but in 2021 core inflation is anticipated to rise to only 1.4%. In terms of the new 2022 forecasts, these too were very much on the cautious side, with GDP growth at just 1.4% and both headline and core inflation both at 1.6%.

Interestingly, and this may not be something the ECB would have necessarily intended to draw attention to, a core inflation forecast of 1.6% on a 3-year out horizon is actually the lowest figure the ECB has ever published (although not to blow this out of proportion, in terms of 3-year out forecasts, they have only been published since 2016). One interpretation is that this low figure highlights the scale of the ECB’s challenge in getting inflation back to target. A more generous take is that the ECB is being deliberately overcautious, which then gives it room to push its growth and inflation forecasts higher next year.

Indeed, our own view is that the euro area will outperform expectations in 2020. And if that happens, the ECB will be in a position to raise its forecasts and remove its easing bias around mid-year. However, much is dependent on when the ECB concludes a review of its policy framework.
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