{"id":18825,"date":"2016-03-14T12:08:29","date_gmt":"2016-03-14T17:08:29","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18825"},"modified":"2016-03-14T12:08:29","modified_gmt":"2016-03-14T17:08:29","slug":"ryan-mcmaken-the-european-central-bank-finally-throws-in-the-kitchen-sink","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18825","title":{"rendered":"Ryan McMaken: The European Central Bank Finally Throws in the Kitchen Sink"},"content":{"rendered":"
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RYAN MCMAKEN: THE EUROPEAN CENTRAL BANK FINALLY THROWS IN THE KITCHEN SINK<\/a><\/h3>\n<\/div>\n<\/header>\n
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Back in January, ECB President Mario Draghi\u00a0doubled down<\/a>\u00a0on his earlier commitment to do \u201cwhatever it takes\u201d to prop up the European economy with easy money.\u201d \u201cThere are no limits to how far we<\/a>\u2019re willing to deploy our instruments<\/a>,\u201d Draghi swore in January.<\/p>\n

He wasn\u2019t joking. Today, Draghi and the ECB resorted to what some are calling the \u201ckitchen sink\u201d option, and what others are calling the \u201cbazooka.\u201d<\/p>\n

You don\u2019t have to be an expert on monetary policy to understand what these metaphors are trying to tell you.<\/p>\n

According\u00a0to CNBC<\/a>:<\/p>\n

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In light of cuts to the growth and inflation outlook, the ECB announced on Thursday that it had cut its main refinancing rate to 0.0 percent and its deposit rate to minus 0.4 percent.<\/p>\n

\u201cWhile very low or even negative inflation rates are unavoidable over the next few months as a result of movement in\u00a0oil prices<\/a>, it is crucial to avoid second-round effects,\u201d Draghi said in his regular media conference after the ECB statement.<\/p>\n

The bank also extended its monthly asset purchases to 80 billion euros ($87 billion), to take effect in April. In addition, the ECB will add corporate bonds to the assets it can buy \u2014 specifically, investment grade euro-denominated bonds issued by non-bank corporations. These purchases will start towards end of the first half of 2016.<\/p>\n<\/div>\n<\/blockquote>\n

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Eighty billion euros? That\u2019s a huge number. Some may remember that during QE3 \u2014 the largest of the Quantitative Easing programs \u2014 in 2013, the Fed\u00a0was making $85 billion per month in asset purchases<\/a>.<\/p>\n<\/div>\n

It eventually trimmed back to $75 billion and\u00a0then $65 billion<\/a>. In that time, the Fed amassed a balance\u00a0sheet of more than $4 trillion<\/a>.<\/p>\n

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…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

RYAN MCMAKEN: THE EUROPEAN CENTRAL BANK FINALLY THROWS IN THE KITCHEN SINK Back in January, ECB President Mario Draghi\u00a0doubled down\u00a0on his earlier commitment to do \u201cwhatever it takes\u201d to prop up the European economy with easy money.\u201d \u201cThere are no limits to how far we\u2019re willing to deploy our instruments,\u201d Draghi swore in January. He […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[7380,195,233,282,303,305,426,1044,1234],"class_list":["post-18825","post","type-post","status-publish","format-standard","hentry","category-economics","tag-cobden-centre","tag-debt","tag-ecb","tag-european-central-bank","tag-fed","tag-federal-reserve","tag-inflation","tag-mario-draghi","tag-stimulus"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18825","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18825"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18825\/revisions"}],"predecessor-version":[{"id":18826,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18825\/revisions\/18826"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18825"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18825"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18825"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}