Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Canadian Pension Risk Strategies
    • 2023 Retirement Income
Breadcrumb
  1. Home
  2. ECONOMY
September 07, 2017 01:00 AM

ECB holds rates steady, expected to announce tapering plan next month

Sophie Baker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg

    The European Central Bank kept interest rates steady, but reinforced money managers' expectation that tapering will be announced in October.

    The central bank's governing council kept the interest rate on the main refinancing operations of the eurosystem, which provides the bulk of liquidity to the banking system, at zero. Overnight credit for banks, known as the marginal lending facility, was kept at 0.25%, while the interest rate on the deposit facility, which banks in the region may use to make overnight deposits, was held at -0.4%.

    The euro was hovering around $1.20 following a news conference held by the ECB. The euro was up 0.6% vs. the dollar since the U.S. market close Wednesday.

    Mario Draghi, president of the ECB, said at a news conference Thursday that while the exchange rate is "not a policy target," it is important regarding growth and inflation in the eurozone, and resulted in the downward revision for medium-term inflation projections. Regarding the appreciation of the euro, Mr. Draghi added the ECB's governing council "will have to take into account this element … in our future policy decisions."

    Changes were made to the ECB staff macroeconomic projections for the eurozone. Real GDP was revised upward vs. projections in June, to 2.2% for 2017, up from 1.9%. GDP growth forecasts for 2018 and 2019 were unchanged at 1.8% and 1.7%, respectively.

    Inflation projections were held for 2017 at 1.5%, but revised downward for 2018 to 1.2% compared with 1.3% in the bank's June forecast; and to 1.5% in 2019, down from 1.6% in the previous forecast.

    Money managers also highlighted the deferral of any decision on quantitative easing tapering to October. The governing council meets on monetary policy Oct. 26.

    "While there has been a noticeable firming in growth across the region, inflation continues to disappoint on the downside, not helped by the recent strength in the euro, which will have a dampening effect," said Brendan Lardner, active fixed-income portfolio manager at State Street Global Advisors, in a reaction comment. "A tapering of the purchase program will have to take place from next year due to technical constraints … It appears when the decision to taper is made, policy accommodation will be withdrawn at a cautious pace that is heavily data dependent."

    Regarding the impact of Mr. Draghi's comments on the currency, Patrick O'Donnell, senior investment manager at Aberdeen Standard Investments, said in a separate comment: "(Mr.) Draghi's probably done enough to slow the appreciation in the euro but not the path of travel, which is up. There's no question that the ECB is worried about the euro's appreciation, but there's little he can actually do about it. That's why the euro has rallied based on what Draghi has said: markets know there's only so much he can say." He added the ECB's plan to announce tapering plans next month was "widely expected by the markets."

    Related Articles
    ECB stands pat on interest rates
    Greece back in bond market, but investors aren't swarming
    ECB to halve monthly asset purchases to €30 billion, keeps rates steady
    Recommended for You
    Washington Coronavirus 04012020_i.jpg
    U.S. credit rating under review amid 'debt ceiling brinkmanship'
    bank_of_england_plaque_1550-main.jpg
    BOE tightening will continue after U.K. inflation data – managers
    Ali Dibadj
    Janus CEO warns investors to consider more factors with era of free money over
    Retirement Income | Industry Brief
    Sponsored Content: Retirement Income | Industry Brief

    Reader Poll

    May 1, 2023
     
    SEE MORE POLLS >
    Sponsored
    White Papers
    Counting on a Crisis: A Catalyst for Investment Innovation?
    A Strategic Allocator's Guide to Productivity and Profits
    Biodiversity: why investors should care
    Quantifying sustainability – the numbers, the data, and the people
    Valuing Banks: Hidden Losses Versus Assets
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Canadian Pension Risk Strategies
      • 2023 Retirement Income