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Q&A continues: Q: Did Lagarde take part in......>

ECB
ECB: Q&A continues:
Q: Did Lagarde take part in discussion and did she agree?
- She didn't take part.
Q: Market interest rates rose - is he comfortable with what was priced in?
- Main goal of Sep decision was to cement accommodative policy stance which had
been affected by weakening medium-term outlook. This has been very largely
achieved - yield curve has flattened etc. More important reason for developments
is overall uncertainty - Brexit cliff edge going has improved uncertainty - but
other uncertainty has increased/continued. Market showed it perfectly understood
ECB reaction function.
Q: Bundesbank said recession risk in Germany. Are there same policy options if
Germany pulls others into recession?
- Everything since Sep ECB decision (econ data etc), justifies why ECB needed to
act. What extent is weakness in manufacturing spreading to service sector? Now
seeing PMI services declining sharply and other indices pointing in that
direction (wasn't the case until a couple of months ago).
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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