{"id":6207,"date":"2015-03-05T06:40:16","date_gmt":"2015-03-05T11:40:16","guid":{"rendered":"http:\/\/olduvai.ca\/?p=6207"},"modified":"2015-03-05T06:40:16","modified_gmt":"2015-03-05T11:40:16","slug":"ecb-will-cut-rates-to-minus-3-jp-morgan","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=6207","title":{"rendered":"ECB Will Cut Rates To Minus 3%: JP Morgan"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2015-03-04\/ecb-will-cut-rates-minus-3-jpmorgan\" target=\"_blank\">ECB Will Cut Rates To Minus 3%: JP Morgan<\/a><\/h3>\n<p>A running theme here over the past several weeks has been that the ECB\u2019s \u20ac1.1 trillion foray into quantitative easing will be\u00a0<a href=\"http:\/\/www.zerohedge.com\/news\/2015-03-03\/complete-preview-q%E2%82%AC-and-why-it-will-fail\">severely hindered<\/a>\u00a0by a laundry list of constraints (some of which were unwittingly self-imposed). Another topic we\u2019ve covered exhaustively is the idea that the world\u2019s central banks will likely all, in relatively short order, run up against the\u00a0<a href=\"http:\/\/www.zerohedge.com\/news\/2015-03-02\/japan-approaches-limit-bond-buying-former-boj-official-okina-warns\">natural limits<\/a>\u00a0of accommodative monetary policy (indeed, even some Japanese policy makers are starting to agree on this).<\/p>\n<p>Thinking about these two things in conjunction raises an interesting question for the ECB: if a tail event comes rearing its ugly head and the global central bank race to the bottom accelerates, will Mario Draghi, effectively fighting with one hand tied behind his back by virtue of Q\u20ac\u2019s limitations, be able to fend off an outright collapse?<\/p>\n<p>Here\u2019s\u00a0<a href=\"http:\/\/www.zerohedge.com\/news\/2015-03-04\/ecb-will-cut-rates-minus-3-jpmorgan\">FT<\/a>\u00a0with more:<\/p>\n<blockquote>\n<div class=\"quote_start\"><em>&#8230;the ECB is now close to running out of ammunition. The true constraints on further ECB intervention lie in the 25 per cent issue limit and 33 per cent issuer limit on its sovereign bond purchases.<\/em><\/div>\n<p><em>Except for Greek debt, the 25 per cent and 33 per cent caps should not prove binding in a scenario where the ECB keeps its monthly asset purchase pace of \u20ac60bn.\u00a0<strong>However, the limits could be reached in worst-case scenarios where the ECB would have to boost the size of its QE programme or implement OMTs targeted on specific sovereigns.<\/strong><\/em><\/p><\/blockquote>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>ECB Will Cut Rates To Minus 3%: JP Morgan A running theme here over the past several weeks has been that the ECB\u2019s \u20ac1.1 trillion foray into quantitative easing will be\u00a0severely hindered\u00a0by a laundry list of constraints (some of which were unwittingly self-imposed). Another topic we\u2019ve covered exhaustively is the idea that the world\u2019s central [&hellip;]<\/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":[233,279,284,3925,452,1044,1768,1389,2719,661,662],"class_list":["post-6207","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ecb","tag-eu","tag-european-union","tag-eurupean-central-bank","tag-japan","tag-mario-draghi","tag-negative-interest-rate-policy","tag-nirp","tag-omt","tag-qe","tag-quantitative-easing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6207","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=6207"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6207\/revisions"}],"predecessor-version":[{"id":6208,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6207\/revisions\/6208"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}