An ECB jab at the Fed

The euro has lifted back to near the 1.40 level vs the US$ after ECB member Weber basically said their benchmark rate will not go any lower, “the ECB governing council has used the room for rate reductions that was created by waning inflation risks and a dramatic worsening of the economic situation.” On other steps they have taken, such as liquidity facilities and the buyback of covered bonds, “additional steps are not necessary at the moment.” In likely a timing coincidence but ironic that its on the same day the FOMC begins its two day meeting, he says in a jab at the Fed, “the past has shown that an overly generous provision of liquidity in global financial markets in connection with a very low level of interest rates promotes the formation of asset price bubbles.”

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