Richard Cookson, Columnist

The ECB's Claims of Unity Are Woefully Misleading

There’s growing pressure to scale back the central bank's bond purchases. So European yields are likely to rise, sooner and faster than the ECB wants.

March 31, 2021 at 4:00 AM UTC

By Richard Cookson

Richard Cookson was head of research and fund manager at Rubicon Fund Management. Previously, he was chief investment officer at Citi Private Bank and head of asset-allocation research at HSBC.

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Earlier this month, the European Central Bank announced that it would buy more bonds to stop borrowing costs rising. It was worried that the euro zone economy was in such poor shape that it couldn’t afford to have European bond yields dragged higher by their U.S. cousins.

On March 22, to mark the one-year anniversary of its Pandemic Emergency Purchase Programme (PEPP) — which has expanded to 1.85 trillion euros ($2.2 trillion) — a blog attributed to ECB President Christine Lagarde said the central bank would “significantly” increase bond purchases to stop unwarranted tightening in financial conditions. Lagarde said there was total consensus on the governing council for this move.