ECB: Expansionary monetary policy continues to be essential? — Commerzbank

FXStreet — According to the ECB Executive Board member Coeure that the currently very expansionary monetary policy is necessary. This would show studies of the ECB, which, according to the under-utilisation in the labour market is greater than this would signal the official unemployment rate, said Dr. Michael Schubert, Commerzbank expert.

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Therefore, a risk would be to early from the expansionary policies to get out. The ECB would cut economic support to early, you would miss its inflation target «and people needless their job to Rob».

According to ECB governing Council member Vasiliauskas, the ECB should use its June meeting to a slightly less expansionary monetary policy, to prepare, before she could announce in the autumn of concrete measures such as a reduction in the bond purchases. Vasilauskas sees no reason why the interest rates before the end of the purchases increase. If the Transmission of monetary policy is at risk, it is necessary to rethink, but «for such a discussion we need to have clear evidence».

In contrast, ECB governing Council member Weidmann said: «We must not slide out of consideration for the public finances in some countries, or due to any loss of individual financial market participants, monetary policy normalization on the long Bank. Since the ECB needs to show backbone.“

** FXStreet News Editorial, FXStreet**

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