Economists at UBS have also penciled in a deposit rate cut of 10 basis points on September 12 and a further 10 basis points on December 12, following the stark change in U.S. trade and monetary policy outlook amid a drawn out trade war with China. The U.S. Federal Reserve has looked increasingly likely to cut interest rates, with many analysts now pricing in two cuts by the end of the year.
As such, UBS anticipates that the ECB will go further than simply removing the tightening bias from its interest rate forward guidance next Thursday, and expects Draghi to deliver a dovish message. Garcia highlighted that the additional rate cuts would further hurt banks and bank loan creation, with the European banking sector already heavily embattled, and therefore he anticipates that the ECB will implement deposit tiering in order to mitigate the damage. Banks traditionally are hurt by ultra-low rates as it limits their ability to find yield and log profits.
Central Banks as omniscient is not working. Developed countries should float at 1.75/2.25
Loans Loans Latest News, Loans Loans Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: Reuters - 🏆 2. / 97 Read more »
Source: Reuters - 🏆 2. / 97 Read more »