European Central Bank Monetary Policy – Negative Interest Rates & Quantitative Easing Very Bad News


Happy to have you here with me. Today We will
be talking about the European Central Bank monetary policy what their plans are. Sit
back and enjoy. The European Central Bank is relaxing its
monetary policy again. At a Council meeting with far-reaching consequences, it tightened
the penalty interest rates for banks and decided to pump billions into the markets via a bond
programme. The European Central Bank (ECB) has pulled
out virtually every single lever of loose monetary policy in recent years. At the beginning
of 2019, it stepped on the brakes to some extent. Now the arsenal is being expanded
again. These are the decisions of the Governing Council: The penalty interest rates (negative interest
rates) for banks that want to deposit money with the ECB will be increased from -0.4%
to -0.5%. At the same time, the ECB is introducing a
graduated interest rate for certain allowances in order to ease the burden on the banks concerned. The controversial bond purchase programme
will be resumed in order to help countries get cheaper money and to accelerate inflation,
which is too low. In concrete terms, the ECB intends to purchase securities for € 20
billion per month from 1 November. The Governing Council of the ECB did not decide on an end-date
for these purchases. Key interest rates will remain at 0% for the
time being. They have been at this record low since March
2016. Draghi: “ECB is aware of the negative consequences”. ECB President Draghi explained at the media
conference that the very expansionary monetary policy would remain necessary for a longer
period of time. He did not mention a deadline, but a condition. A turnaround is only possible
when the inflation outlook is clearly and stably close to the target of just under 2%.
For the time being, the ECB was prepared to use all instruments if necessary, he noted.
He said it was important to keep an eye on the downside risks – especially with regard
to trade conflicts and other political risks. The ECB is aware that the very loose monetary
policy is having a negative effect on people, especially savers, the ECB President admitted
in the discussion with journalists. However, the measures were economically necessary due
to extensive risks. The growth forecasts for the economy in the
euro zone were slightly lowered: for 2019 to +1.1% (previously: +1.2%), for 2020 to
+1.2% (previously: +1.4%). For 2021, the ECB continues to expect growth
of 1.4%. This weakening of the economy is more severe than expected. This is an important
reason for the further easing of monetary policy. I believe this paints a very clear picture
on what direction the european economy is heading towards. Not only the european economy
but the global economy as a whole. Hope you are looking for your hedge before the upcoming
financial crisis. If you enjoyed this video then i’d appreciate
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