MNI BRIEF: ECB Members Discussed 50bp In December -Accounts
MNI (LONDON) - Some European Central Bank Governing Council members said “a case could be made for a 50 basis point rate cut” in December given the deterioration of the euro area economic outlook over succession exercises, noting that “the baseline probably remained too optimistic” in the updated projections, ECB accounts published Thursday showed,before they joined the consensus to unanimously agree a 25bps cut. (see MNI ECB WATCH: ECB Cuts 25BP, Drops Restrictive Language )
Policymakers showed diverging views over the malaise hitting the Eurozone with some stressing that weakness is caused by structural factors and others pointing to the cyclical component and saying that further accommodation could help to address those issues.
It was acknowledged that projections could not incorporate the expected trade policy changes announced by US president elect Donald Trump, creating uncertainty, but “It was remarked that the inflationary effects of the pre-announced US policies were likely to be bigger in the United States than in the rest of the world”.