Central Banks


The full remarks by ECB policymaker, Pierre Wunsch:

“Most of us – probably all of us, actually – are very open to doing something if it’s clear enough that there’s a problem of markets overreacting or unwarranted fragmentation. But we should be careful not to give too much of an impression to authorities that we will immediately jump to their help in whichever uncomfortable situation they might find themselves. In addition, if you are too specific about a new instrument, there’s a concern that you’re going to lose flexibility. So, we should not over-engineer before knowing what the circumstances are.”

That makes it a bit clear that they aren’t going to deliver plenty of details or specifics later. Instead, expect the ECB to reaffirm that they are committed to counter fragmentation risks – should they arise – moving forward.

Wunsch, who is a hawk, also says that the next 150-200 bps worth of rate hikes are pretty much “no brainers”. *laughs in recession*



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