The European Central Bank accelerated the progress on the path of policy normalization, despite the uncertainty caused by the Russian invasion of Ukraine. Initial assessments of the economic impact of the latter appear very mild, at least in the baseline forecasting scenario, although the balance of risks is clearly tilted to the downside for growth. The ECB is keeping […]

European Central Bank – The monetary policy meeting on 10 March should have marked the change in pace of the monetary policy normalisation process. The Russian invasion of Ukraine has upturned every plan: the reduction plan must now be put aside, in favour of a phase in which developments are carefully monitored. A change in the […]

Euro – The clarifications provided by the ECB following the meeting of meeting of 3 February confirm that the outlook is evolving in such a way as to make more likely a rate hike before the end of the year. In March, the ECB could therefore announce adjustments to its plan for the reduction of net purchases under […]

ECB: the horizon for forward guidance is shortening. Some of President Lagarde’s answers indicate that the Governing Council may an acceleration of the path to reduce net purchases could perhaps be decided in March, if the staff’s projections change significantly by then. Bank of England: after being the first G7 central bank to raise rates in the pandemic era […]

FOMC: new year, new monetary policy. Maximum employment is here, and elevated inflation is placing the price stability goal at risk.The FOMC is preparing to remove monetary stimulus, with the rates’ liftoff expected in March, a path of gradual hikes, a reduction of the Fed balance sheet starting by the summer and a possible acceleration of the tapering […]

FOMC: new year, new monetary policy. Maximum employment is here, and elevated inflation is placing the price stability goal at risk.The FOMC is preparing to remove monetary stimulus, with the rates’ liftoff expected in March, a path of gradual hikes, a reduction of the Fed balance sheet starting by the summer and a possible acceleration of the tapering […]

The debate on how to improve the european union’s fiscal rules will come into full swing this year. Literature on the topic is leaning towards setting ceilings on primary spending growth, calculatedin such a way as to allow a gradual reduction of the debt/GDP ratio, under a scenario of GDP growth in line with the trend […]

ECB: we believe the uncertainty on the outlook will reduce the scope of next week’s announcements. Confirmation should come that PEPP net purchases will be suspended from April, but without closing the door to a possible resumption in case of need. The decision on how to ‘smooth out’ the end of PEPP purchases could be […]

Euro area – In November, inflation rose much more than expected; we continue to forecast a downward trend next year, although the CPI could remain above 2% for most of 2022. For what concerns growth, November surveys outlined on the one hand an initial easing of the supply-side bottlenecks that are dampening industrial output, and on […]

Euro area: the trend of energy commodity prices is affecting not only inflation, but also real growth. Based on our simulations, higher oil and gas prices will subtract four tenths of a percentage point to Eurozone GDP growth in 2022. Also, high uncertainty on the future evolution of energy prices is adding to uncertainty on the trend of GDP. United […]