E C B: Inflation Is Not Threat, No Need For Higher I R

[Realistbear]

http://www.bloomberg.com/news/2011-01-19/ecb-officials-edge-back-from-threat-of-higher-interest-rates.html

European Central Bank officials edged back from a threat to raise interest rates, saying markets have over-reacted to their change in tone on inflation.

“The Governing Council of the ECB sees present interest rates as adequate,” council member Ewald Nowotny said at an event in Budapest yesterday. “We do not see a need for an interest rate change in the foreseeable future.” Bundesbank President Axel Weber also said he expects inflation to remain below the ECB’s 2 percent limit in the medium term, softening his language on the risks to price stability.

Deflation cometh next. At least, our Gilt market seems to be saying that.

[easy2012]

http://www.bloomberg.com/news/2011-01-19/ecb-officials-edge-back-from-threat-of-higher-interest-rates.html

European Central Bank officials edged back from a threat to raise interest rates, saying markets have over-reacted to their change in tone on inflation.

“The Governing Council of the ECB sees present interest rates as adequate,” council member Ewald Nowotny said at an event in Budapest yesterday. “We do not see a need for an interest rate change in the foreseeable future.” Bundesbank President Axel Weber also said he expects inflation to remain below the ECB’s 2 percent limit in the medium term, softening his language on the risks to price stability.

Deflation cometh next. At least, our Gilt market seems to be saying that.

Wait till the Bundesbanker Axel Weber gets appointed as president and they may have a different view..

[EvilEdna]

Wait till the Bundesbanker Axel Weber gets appointed as president and they may have a different view..

Talking of appointments, I spotted this recently :angry: :

Andrew Sentance, the lonely hawk on the MPC, completes his second term at the end of May. Only one external member has ever served three terms so Sentance probably has only four more monthly meetings to press his case for a small rise in rates.

[scepticus]

Deflation cometh next. At least, our Gilt market seems to be saying that.

err, why do you say that?