Frankfurt Jens Weidmann has already anticipated. “Especially in the first half are temporary inflation again below zero conceivable,” the Bundesbank chief said last week. How quickly this prediction has now been fulfilled, came to most experts then but surprising.
Because in February prices in the euro zone are surprisingly like. They fell compared to the previous month by 0.2 percent, as the European statistics office on Monday announced based on preliminary figures. “Crumbles The inflation picture of the ECB,” said Commerzbank chief economist Joerg Kraemer. In March, the ECB introduces new inflation forecasts and will make its monetary policy to the test. The ECB aims to beat inflation of just under two percent. Lowers the Fed their forecasts significantly, an easing of monetary policy is very likely.
Governing Council meeting More easing of monetary policy without Weidmann?
But currently talking much. In particular, the fall in oil prices will ensure that the cost of living fall: Energy prices were down in February on the year to 8.0 percent. But the price decline is not limited to energy. In February, the adjustment for energy core rate is, for example, increased by only 0.7 percent. “It is increasingly unlikely that core inflation – as hoped by the ECB – on average this year to 1.3 percent increases,” said Commerzbank chief economist Kramer
The question therefore seems less whether the monetary policy. loosened is rather than how. As probably applies a reduction of the deposit interest rate. This is now at minus 0.3 percent. This means that banks park overnight money at the ECB will have to pay a higher penalty. They should encourage them to use surplus cash for new loans, rather than to store them at the ECB.