![\"ECB\"](\"https:\/\/lazardfreresgestion-tribune.com\/wp-content\/uploads\/\/2018\/06\/Capture-ECB-the-finish-line-is-in-right-ECB-monetary-policy.png\")
<\/p>\nCHART OF THE WEEK<\/b><\/p>\n
The ECB meeting on 14 June saw Europe\u2019s central bank announce it will be halving its securities purchases from \u20ac30 billion down to \u20ac15 billion in the final quarter of 2018. After that, it will focus on reinvesting funds from maturing securities. The ECB also announced it wants to maintain benchmark rates at their current levels until the summer of 2019. As always, the ECB\u2019s actions will be subject to economic developments coinciding with its expectations.<\/p>\n
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OUR ANALYSIS<\/b><\/p>\n
Mario Draghi confirmed that the central bank does not believe this year\u2019s softer eurozone economic expansion will threaten the growth scenario. To date, economic indicators remain consistent with growth of 2%, which is above the eurozone\u2019s potential growth rate. Unemployment continues to fall (it stood at 8.5% in April) and there are now some signs of rising wages growth.<\/p>\n
The ECB\u2019s balance sheet will peak at just over 40% of GDP. The US Federal Reserve equivalent was 25% at the end of 2014. The ECB\u2019s statements indicate that its endgame strategy will be very similar to that of the Federal Reserve, namely a process that starts with a halt in asset purchases, followed by higher rates and doubtless the start of balance sheet shrinkage once rates have risen several times. Mario Draghi clarified that securities purchases will continue to be part of the central bank\u2019s toolbox. Whether his successor will be as inclined to use them remains to be seen.<\/p>\n
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The opinion expressed above is dated 20 June 2018 and is liable to change.<\/em><\/p>\n This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Fr\u00e8res Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Fr\u00e8res Gestion SAS.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" CHART OF THE WEEK The ECB meeting on 14 June saw Europe\u2019s central bank announce it will be halving its… <\/p>\n","protected":false},"author":101016,"featured_media":7737,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[148],"tags":[],"class_list":["post-7730","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chart-of-the-week"],"yoast_head":"\n