The Wind of Change: Economic and Financial OutlookLatvijas Banka
Presentation by Governor of Latvijas Banka and member of the Governing Council of the European Central Bank Mārtiņš Kazāks during discussion on Latvia's economic developments in Brussels.
A moderate expansion is underway in most major advanced and emerging economies, but growth remains weak in the euro area, which runs the risk of prolonged stagnation if further steps are not taken to boost demand.
Romain Duval. IMF Regional Economic Outlook for EuropeEesti Pank
31. oktoobril 2022 toimus Eesti Panga avatud seminar, kus Rahvusvahelise Valuutafondi esindaja Romain A. Duval tutvustas IMFi Euroopa osakonnas vastvalminud regionaalset majandusväljavaadet.
The Wind of Change: Economic and Financial OutlookLatvijas Banka
Presentation by Governor of Latvijas Banka and member of the Governing Council of the European Central Bank Mārtiņš Kazāks during discussion on Latvia's economic developments in Brussels.
A moderate expansion is underway in most major advanced and emerging economies, but growth remains weak in the euro area, which runs the risk of prolonged stagnation if further steps are not taken to boost demand.
Romain Duval. IMF Regional Economic Outlook for EuropeEesti Pank
31. oktoobril 2022 toimus Eesti Panga avatud seminar, kus Rahvusvahelise Valuutafondi esindaja Romain A. Duval tutvustas IMFi Euroopa osakonnas vastvalminud regionaalset majandusväljavaadet.
This presentation provides key findings from the 2019 edition of the OECD Sovereign Borrowing Outlook. This includes gross borrowing requirements, net borrowing requirements, central government marketable debt, funding strategies and instruments and distribution channels.
Find out more at http://www.oecd.org/finance/oecd-sovereign-borrowing-outlook-23060476.htm
Changes in economic environment. Macro overview and outlook for 2013-2014 Mārtiņš Pakulis
A presentation by Mārtiņš Kazāks about «Changes in economic environment. Macro overview and outlook for 2013-2014.»
Presented on 27th March, 2013 in Riga Business School.
Will risks-derail-the-modest-recovery-oecd-interim-economic-outlook-march-2017OECD, Economics Department
Global GDP growth is projected to pick up modestly to around 3½ per cent in 2018, from just under 3% in 2016, boosted by fiscal initiatives in the major economies. The forecast is broadly unchanged since November 2016. Confidence has improved, but consumption, investment, trade and productivity are far from strong, with growth slow by past norms and higher inequality.
From the BPV Capital Management investment team comes our most recent update on capital markets. In this issue, we examine how a risk-on environment in equities did not translate to fixed income, keeping interest rates subdued.
This presentation provides key findings from the 2019 edition of the OECD Sovereign Borrowing Outlook. This includes gross borrowing requirements, net borrowing requirements, central government marketable debt, funding strategies and instruments and distribution channels.
Find out more at http://www.oecd.org/finance/oecd-sovereign-borrowing-outlook-23060476.htm
Changes in economic environment. Macro overview and outlook for 2013-2014 Mārtiņš Pakulis
A presentation by Mārtiņš Kazāks about «Changes in economic environment. Macro overview and outlook for 2013-2014.»
Presented on 27th March, 2013 in Riga Business School.
Will risks-derail-the-modest-recovery-oecd-interim-economic-outlook-march-2017OECD, Economics Department
Global GDP growth is projected to pick up modestly to around 3½ per cent in 2018, from just under 3% in 2016, boosted by fiscal initiatives in the major economies. The forecast is broadly unchanged since November 2016. Confidence has improved, but consumption, investment, trade and productivity are far from strong, with growth slow by past norms and higher inequality.
From the BPV Capital Management investment team comes our most recent update on capital markets. In this issue, we examine how a risk-on environment in equities did not translate to fixed income, keeping interest rates subdued.
Latvijas tautsaimniecības makroekonomiskā attīstība | Septembris 2023Latvijas Banka
Latvijas Bankas prezidenta Mārtiņa Kazāka un Monetārās politikas pārvaldes vadītāja Ulda Rutkastes prezentācija 2023. gada 29. septembrī par jaunākajām ekonomikas prognozēm.
Latvijas Bankas Finanšu pratības daļas vadītājas Aijas Brikšes prezentācija Rīgas Izglītības un informatīvi metodiskā centra seminārā skolotājiem "Drošs internets un droša digitālā finanšu pratība" 2023. gada 29. augustā.
Latvijas Bankas Makroekonomikas analīzes daļas galvenās ekonomistes Baibas Brusbārdes prezentācija seminārā "Aktualitātes ekonomikā" 2023. gada 24. augustā.
Latvijas Bankas Monetārās politikas analīzes daļas galvenās ekonomistes Anetes Kravinskas prezentācija seminārā "Aktualitātes ekonomikā" 2023. gada 24. augustā.
Latvijas Bankas Makroekonomikas analīzes daļas galvenā ekonomistes Dainas Paulas prezentācija seminārā "Aktualitātes ekonomikā" 2023. gada 24. augustā.
Latvijas tautsaimniecības makroekonomiskā attīstība | Marts 2023Latvijas Banka
Latvijas Bankas prezidenta Mārtiņa Kazāka un Monetārās politikas pārvaldes vadītāja Ulda Rutkastes prezentācija 2023. gada 31. martā par jaunākajām ekonomikas prognozēm.
Eiro banknošu pretviltošanas elementi un to pārbaudeLatvijas Banka
Šī Latvijas Bankas naudas zīmju ekspertu prezentācija iepazīstina ar eiro banknošu pretviltošanas elementiem un veidiem kā ikviens var pārlecināties par banknošu īstumu. Vienkāršākais veids - aptaustiet, apskatiet un pagroziet banknotes!
Kā atpazīt ar pretzagšanas ierīcēm bojātas banknotesLatvijas Banka
Latvijas Banka nemaina un neatgriež ar drošības tinti iekrāsotas banknotes, jo tās varētu būt iegūtas noziedzīgā ceļā. Izņēmums ir gadījumi, kad naudas zīmes iesniedz īpašnieks vai tā pilnvarotā persona, kurš ir cietusī persona saistībā ar noziedzīgu darbību vai tās mēģinājumu, kas izraisījusi banknošu bojājumus.
Kā atpazīt šādi bojātas banknotes?
Vairāk informācijas par šādi bojātām banknotēm: https://www.ecb.europa.eu/euro/banknotes/ink-stained/html/index.lv.html
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
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what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
NO1 Uk Black Magic Specialist Expert In Sahiwal, Okara, Hafizabad, Mandi Bah...Amil Baba Dawood bangali
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US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
2. Labour markets remain tight across most dimensions; upside
risks to wage growth.
Main
takeaways
Profit margins remain strong, implying robust demand.
Headline inflation is falling, core remains stubbornly high; strong
labour markets and profit margins may strengthen persistence;
risks of inflation de-anchoring remain.
The economy more resilient than it was forecasted late last year;
recession avoided so far; some rebound in growth in the short term.
Some tightening of financial conditions, generally in line with
monetary tightening; no signs of disorderly developments so far.
Monetary policy: uncertainty remains high, policy lags uncertain; yet,
further rate hikes necessary to bring inflation to the target in a timely
manner (by end 2024?); rates to remain elevated at sufficiently
restrictive levels; balance sheet reduction to be cautious, but persistent.
3. Bloomberg 1-year ahead recession probability index (in %) and changes in probability since November, 2022 (% and % points)
-10
10
30
50
70
90
110
01/13
01/14
01/15
01/16
01/17
01/18
01/19
01/20
01/21
01/22
01/23
EA US UK
EA US UK
80
60
80
45
65 65
-40
-20
0
20
40
60
80
100
EA USA UK
Change since
Nov-22
Recession
probability in
Nov-22
Recession
probability, latest
(April, 2023)
3 Source: Bloomberg, Latvijas Banka staff calculations.
Economy more resilient than it was forecasted late last year:
recession fears have retreated
4. EA PMI (balance of answers)
30
35
40
45
50
55
60
65
70
05/21 08/21 11/21 02/22 05/22 08/22 11/22 02/23
Composite Manufacturing Services
EA GDP (%; q-o-q), Eurocoin (%; m-o-m) and
sentiment (point) indicators
4 Sources: S&P Global, Eurostat, EC, ECB, Eurocoin and Latvijas Banka's calculations.
Economy more resilient than it was forecasted late last year:
growth expected to rebound, albeit moderately
30
35
40
45
50
55
60
65
70
-1
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
02/22 06/22 10/22 02/23 06/23 10/23 02/24
GDP Mar MPE Dec BMPE
Eurocoin Composite PMI (rhs) ESI/2 (rhs)
5. Labor market indicators (normalized)
Unemployment rate (inv.)
Underemployment rate (inv.)
Youth employment rate (inv.)
Share long-term unemployment (inv.)
Short-term unemployment rate (three months)
(inv.)
Job separation rate (inv.)
Job finding rate
Job vacancy rate
Factors limiting production, shortage of labour
Employment (growth)
EEI (replace PMI on employment)
Compensation per hour (growth)
Labour productivity per hour (growth)
Average hours worked (growth)
Employment -population ratio (prime-age)
Labour force participation
2011-2015
2019
2022
Latest
5
Sources: Eurostat, EC and Latvijas Banka calculations.
Note: Based on ECB (2019). Momentum calculated as Principal component of the labor market indicators in radar chart, Q1 2010 – Q4 2022.
Labor market remains tight across most segments
6. Relationship between unemployment and wage
growth in EA, 1Q2012 - 4Q2022
Compensation per employee in EA countries
(annual % change)
6 Sources: Eurostat and Latvijas Banka's calculations.
Philips curve waking up?
Tight labour market and high inflation fuell wage demands
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Q1
2012
Q1
2013
Q1
2014
Q1
2015
Q1
2016
Q1
2017
Q1
2018
Q1
2019
Q1
2020
Q1
2021
Q1
2022
EA GER FRA
ESP ITA NED
0.0
1.0
2.0
3.0
4.0
5.0
6.0
6.0 8.0 10.0 12.0 14.0
Compensation
per
employee
(annual
%
change)
Unemployment rate (%)
Q1 2012-Q1 2021
Q3 2021-Q4 2022
7. Headline, core and energy inflation (%) and changes since November, 2022 (% points)
-15
0
15
30
45
60
-5
0
5
10
15
20
01/08 10/09 07/11 04/13 01/15 10/16 07/18 04/20 01/22
Headline inflation
Core inflation
Energy (rhs)
7 Source: Eurostat.
Energy prices have dropped, pulling down headline inflation;
core remains stubbornly high
7
5.6
2.5
-3.1
0.6
-32.4
-35
-30
-25
-20
-15
-10
-5
0
5
10
Headline inflation Core inflation Energy
Annual rate, April 2023
Changes from November
9. Gross profit margin of NFCs in EA
(% of value added)
25
30
35
40
45
50
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Euro area Germany Spain
France Italy
Profit share of value added (nominal gross
operating surplus / nominal value added)
0.35
0.4
0.45
0.5
0.55
0.6
2013 2015 2016 2018 2020 2022
All activities
Construction
Industry (except construction)
Retail, transport, accommodation and food services
Sources: Eurostat and Latvijas Banka's calculations.
Latest data: Q4 2022.
Notes: when calculating profit share, taxes are not subtracted from profit due to lack of data. Actual profit share is lower.
Profit margins remain strong: firms able to pass through their
cost increases (and more?)
9
10. Outstanding MFIs’ loans in the Euro Area: stocks
(tn €) and growth rates (y-o-y %) by sector
Easing of credit standards by sector
(net % of reporting banks)
10 Source: ECB’s Statistical Data Warehouse, ECB`s Bank Lending Survey.
Credit growth is slowing, credit standarts become tighter
0
2
4
6
8
10
12
14
0
5
10
15
20
01/19 07/19 01/20 07/20 01/21 07/21 01/22 07/22 01/23
Stocks, households
Stocks, non-financial corporations
Growth rate, non-financial corporations (right)
Growth rate, households (right)
Growth rate, total (right)
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
Q1
2019
Q3 Q1
2020
Q3 Q1
2021
Q3 Q1
2022
Q3 Q1
2023
Observed, non-financial corporations Observed, households (housing)
Forecasted, non-financial corporations Forecasted, households (housing)
Easing
Tightening
11. Factors determining tightening of credit standards for loans to enterprises (net % of reporting banks)
11 Source: ECB’s Bank lending survey.
-5% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Capital position
Access to market financing
Liquidity position
Competition from other banks
Competition from non-banks
Competition from market financing
General economic situation and outlook
Industry or firm-specific situation and outlook
Risk related to the collateral demanded
Bank's risk tolerance
Q1, 22 Q2, 22 Q3, 22 Q4, 22 Q1, 23
Credit growth is slowing, limited spillovers from the US
12. Euro zone banks' bond yields spread versus 5Y
OIS swap rates (basis points)
0
50
100
150
200
250
300
350
400
450
01.2020 07.2020 01.2021 07.2021 01.2022 07.2022 01.2023
iBoxx EUR Collateralized Index iBoxx EUR Banks Subordinated
iBoxx EUR Banks Senior Preferred iBoxx EUR Banks Senior Bail-in
European and US banks stock price indexes
(01.01.2020. =100)
40
50
60
70
80
90
100
110
120
01.2020 07.2020 01.2021 07.2021 01.2022 07.2022 01.2023
EURO STOXX BANKS S&P 500 BANKS
12 Source: Refinitiv; Bloomberg, Latvijas Banka staff calculations.
Financial stability risks so far contained: no extra tightening
13. 10Y government bond nominal yields (%) Government bond real yields* (%)
13
*Calculated as difference between GDP weighted nominal yield and corresponding euro area inflation swap rate.
Source: Bloomberg, Refinitiv, ECB.
Government bond yields rise along with policy rates;
back into positive territory
-5
-4
-3
-2
-1
0
1
2
3
2020 2021 2022 2023
Euro zone 2Y US 2Y Euro zone 10Y US 10Y
-1
0
1
2
3
4
5
01/20 07/20 01/21 07/21 01/22 07/22 01/23
IT PT ES FR NL DE
14. 14 Source: Bloomberg, ECB SPF.
0
0.5
1
1.5
2
2.5
3
3.5
Q3
2004
Q1
2006
Q3
2007
Q1
2009
Q3
2010
Q1
2012
Q3
2013
Q1
2015
Q3
2016
Q1
2018
Q3
2019
Q1
2021
Q3
2022
EA 5y5y US 5y5y EA 1y1y ECB target
Market-based measure of inflation expectations Longer-term (2027) SPF inflation expectations (%)
Long-term inflation expectations: anchored, but risks remain
o o o o o o o o o o
15. 15
Terminal rate
expectations at higher
level compared to end
of 2022, but still lower
than pre-SVB
With policy rates into restrictive territory,
smaller rate hikes appropriate;
transmission lags uncertain.
Policy decisions data-dependent: smaller
size of rate hikes does not necessarily
imply the near end of the tightening cycle.
Does the speed of travel matter or is it
only the total distance that matters?
Balance sheet reduction: alingning all
instruments and re-creating policy space.
16. Overnight money market and policy rates (%)
16 Source: ECB, LB estimates
With policy rates likely in restrictive territory,
smaller size of rate hikes is appropriate
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
01/20 07/20 01/21 07/21 01/22 07/22 01/23
Range of most plausible estimates of i* €STR Deposit facility rate
17. 17 Source: Bloomberg, Refinitiv.
Monetary policy:
further rate increases
and balance sheet
reduction to follow
Current profile hard to square
with current inflation outlook.
-1
-0.5
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2022 2023 2024 2025 2026
ESTR forward curve (% per annum)
ESTR forward curve, pre-SVB collapse (2023-03-09)
ESTR forward curve, pre-march GovC (2023-03-15)
ESTR forward curve, latest (2023-05-09)
ESTR
18. 18
Risk management: minimize the worst-case scenario
Current balance in favour of resolute action to combat inflation forces
Risks of
doing too
much
Risks of
doing too
little
• Too low ex-ante real rates due
to persistent inflation surprises;
• Potential de-anchoring of
inflation expectations;
• Higher terminal rates, as policy
needs to correct for past
under-shooting;
• Interest rate volatility diluting
the impact of monetary policy
signal;
• Potential for a boom-bust cycle
in the economy;
• Potentially deeper recession
than in the case of gradual
interest rate adjustment.
• Policy overshooting leading to
renewed recession and deflation
risks over the medium term;
• Faster pace of interest rate hikes
may amplify credit slowdown,
lead to credit crunch and
financial stability concerns;
• Public debts sustainability
concerns rising (at least in some
jurisdictions);
• In case of a potentially quick
reversal of policy stance,
interest rate volatility may
increase;
• Risks of credibility weakening if
rate reversal perceived as a
policy mistake.
20. 20
Unemployment rate vs structural budget
balance in euro area, 2015-2025
*Projections
Source: European Commission, ECB.
Monetary policy not
the only game in town.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
2015
2016
2017
2018
2019
2020
2021
2022
2023*
2024*
2025*
Structural budget deficit (% of GDP) - LHS
Unemployment rate (%) - RHS
Fiscal support must be timely,
temporary, and targeted not to add
to inflation risks.
The materialization of these risks will
call for a stronger monetary policy
response.