The election of Emmanuel Macron as France’s next president has removed a big risk to the euro-zone economic outlook. This could allow the ECB to stop worrying about political risks and to concentrate more on the euro-zone’s healthy economic performance. Indeed, the ECB’s long-held position that the risks to the economic outlook are “skewed to the downside” is becoming harder to defend.
Accordingly, at the next press conference on 8th June, the Bank is likely to end its pledge to keep interest rates at current “or lower” levels for an extended period. And we think that it will taper its asset purchases to zero in the first half of next year. That said, while the ECB may be preparing to ease the pressure off the monetary policy accelerator, it is nowhere near ready to hit the brake.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services