This is getting sort of ridiculous. I think it’s evident to anyone watching Europe that they’re in a permanent state of QE. I recall writing about POMO and how America would be in QE for life, but we ended up half-assing our way out of QE. Look at Europe, just today announcing TLTRO-III — lasting thru 2021.
TLTRO-III is the third European bank lending program, offering bailout styled cheap rates to bedraggled banks living on their continent.
Rates go unchanged at 0% for marginal lending and -0.4% for deposits. European citizens are in a constant state of beatdown by their banks.
Part of this, of course, has to do with Italy entering a recession towards the end of 2018. Had Europe opted to reset their banking system and let them fail — perhaps they’d be healthier now. Alas, living in a world with zombified banks requires constant vigilance.
ECB President Mario Draghi said Thursday that there has been a “sizable moderation in economic expansion that will extend into the current year.”
“While there are signs that some of the idiosyncratic domestic factors dampening growth are starting to fade, the weakening in economic data points to a sizable moderation in the pace of the economic expansion that will extend into the current year.”
The only great market move, based on this news, is the euro sharply lower vs the dollar — now off by 0.5%Comments »