State Street Reacts to European Central Bank Interest Rate Decision

In light of today’s interest rate decision from the European Central Bank (ECB) Tim Graf, head of macro strategy – Europe at State Street Global Markets, and David Furey, Portfolio Strategist, Fixed Income, Cash & Currency at State Street Global Advisors, offers their views.

Tim Graf: “As we expected, the ECB held to their current set of policies. We were a bit surprised by the relatively upbeat take on current events and their impact on inflation and inflation expectations. While we think they will stand pat on major innovations for now, as previously announced programmes unfold, we suspect the need to ease may emerge later this year.”

David Furey: “Uncertainty over the impact of the referendum result is more on degree rather than direction, and so it is surprising that this was not reflected in a view that risks are skewed to the downside.