ECB Maintains Loose Monetary Policy - Where Does this End?

On the 22 April 2021 the European Central Bank’s governing council reconfirmed its current monetary position. The interest rates on the main refinancing operations (0.00%), marginal lending facility (0.25%), and the deposit facility (-0.50%) will all remain unchanged. Unless inflation becomes more widespread it would appear low - negative interest rates are here to stay at least for the moment.

Considering that the ECB will continue with bond purchases (under PEPP) totalling €1,850 billion until at least the end of March 2022 (or until the coronavirus crisis phase is over) the ECB will remain an active market participant. From an investor's stand point the combination of perpetual low/negative IR & an excess money supply leaves the market in somewhat new territory.

Considering the shift in these market policies Monnet Capital is committed to fully understanding our clients risk profiles from an inflation standpoint as well. We are focused on identifying the correct financial recommendations based on their needs for capital preservation, growth or ethical requirements.