Lisa Gray

ContactLisa Gray has been a wealth writer since 2001. She has been involved in the wealth management industry since 1988. She is the author of two bestselling books—The New Family Office and Generational Wealth Management.
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graymatter Strategies LLC

The European Central Bank Says It Will Sit Still On Interest Rates And Bond Buying Programs edit
Thursday, May 03, 2012 09:14

Tags: European crisis | global investing | US investing

Anyone hoping that the European Central Bank (ECB) might change its traditional too-slow-to-act will be disappointed. The ECB announced that its Thursday meeting will not yield any change in its approach to solving the European Union’s sovereign debt crisis. This is news which most certainly will be unwelcome to the capital markets.

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Europe’s austerity program is hindering distressed countries’ ability to gain more solid footing after the 2008 financial crisis. Financial markets have been pressing the ECB to reactivate its Securities Markets Program to buy Spanish sovereign bonds. The German Bundesbank is standing against the ECB’s consideration of lowering interest rates and purchasing the bonds of debtor countries.
 
If the yields on Spanish bonds go as high as 7%, it may force some sort of buying action. For now, the only action the ECB is taking is to praise Spain’s attempts to cut spending. The ECB has left the door open for an interest rate cut in June. Meanwhile, markets may continue to suffer as the European austerity program fails to produce sufficient results.

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