ECB Preview: Unintended Consequences of Tiering
(3 min read)
While the market remains focused on the headline announcements about rate cuts and the restart of QE, the ECB’s decisions on tiering and issue/issuer limits could be more important looking ahead. And here are three reasons why:
1. Rebalancing Monetary and Fiscal Policy Support
Any tiering announcement could confirm the reluctant acceptance within the ECB of the cost of negative rates for the banking system. Coinciding with significant changes in the composition of the ECB governing council it could indicate a broader policy shift.
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