uropean Central Bank monetary policy decision – 12 September 2019
- Prior decision
- Main refinancing rate 0.00%
- Marginal lending facility 0.25%
- Deposit facility rate -0.50%
- Announces rate tiering system
- To introduce two-tier system for negative rate policy
- Reintroduces QE, €20 billion per month from 1 November
- Says to buy bonds as long as needed
- To stop purchases shortly before raising rates
- Modalities of TLTROs will be changed
- Sees rates at present or lower levels until inflation outlook robustly converges to central bank’s aim
Overall, the decision here looks to be a weak one in terms of what markets are expecting. But the fact that QE is being reintroduced is giving bond buyers something to chew at (although it is just €20 billion per month). In my view, that’s not good enough.