Beyond Zero
Overview
On June 5, 2014, the European Central Bank crossed an important symbolic line by announcing plans to reduce the policy interest rate into negative territory. Included in this announcement was a host of complementary but nontraditional policy measures, completing the picture of a committee stretching for greater impact.
The author believes that:
- Aggressive policy combined with enhanced bank oversight should lay the groundwork for a more pronounced European recovery.
- Cumulatively, these actions will likely provide further upside support for equities (European in particular) and downward pressure on global fixed income rates.