Europe and the ECB Keep to the Glide Path of Doves
The Fed and the Bank of England have taken up falconry but Lagarde is keeping her hawks to the corner.
Christine Lagarde, president of the European Central Bank.
Photographer: Alex Kraus/BloombergThe European Central Bank, at a major review of its pandemic stimulus, very carefully chose not to adopt any of the hawkishness that both the Federal Reserve and the Bank of England displayed this week. This was as dovish a QE taper as the European government bond market could ever have hoped for. Under the time frame these measures encompass, the ECB won't be contemplating interest rate hikes until 2024 — at the earliest.
President Christine Lagarde was at pains to explain how accommodative the Governing Council had been as it laid out the plans to end the pandemic QE program (known as PEPP) in March as planned. The key was to make sure that its preexisting replacement, the Asset Purchase Program, is — for all intents and purposes — a carbon copy.