A 10 bps ECB rate cut next week now seems to be a certainty.
JP Morgan and Nomura have come out saying it will happen. Nomura normally make correct calls. Nomura have said that they are 80% certain that the ECB will cut next week.
Draghi has as good as said the ECB will do something in September. The ECB are not yet ready for QE, so a 10 bps rate cut make sense.
0.05% repo rate here we come. Every little helps in the fight against deflation.
Well, counter to popular (read: wrong) opinion a 3% base rate but with a QE commitment on sovereign peripheral debt ‘to keep it within x% of Bunds’ would be more inflationary now than rate cuts.
At what point will it sink into the skulls of the nutters in charge that ZIRP is not just Stupid but actually feeds stagnation and deflation?
Yeah I know, ol’ Sidey has been banging that particular drum since the beginning, the old-time Pinsters are probably rolling their eyes and going “Mad uncle Sidey is ranting about ZIRP again, quick someone distract him or he’ll be droning on all night”.
I still say I’m right and economic orthodoxy is wrong though.
Only when they stop teaching monetarist bullsh1t as if it is science.
Yeah, changing the price of one variable (cost of money at central bank) by a few basis points will heavily impact every station in the real economy! Give me a fcuking break.