Europe has reached the zero lower bound. After its June meeting today, the European Central Bank announced a number of policy changes (a “swarm”, according to Joseph Cotterill). Bloomberg’s Maxime Sbaihi helpfully chartified the ECB’s actions:
Investors will get a look at the Federal Reserve’s thinking later on Wednesday in an otherwise quiet week when the Fed releases minutes from its April get-together. There may be a bit in the way of more up-to-date thinking in some of the scheduled Fed speeches, notably Bill Dudley of the New York Fed, along with Fed Chair Janet Yellen later in the week.
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Until about six months ago, Sweden was routinely trotted out as an example of a modeleconomy (not least by Sweden itself). But now it’s time to start talking about Swedish deflation. In March, the economy’s consumer prices were down was down 0.6% from the previous March, following a -0.2% CPI inflation rate in February. CPI inflation has been hovering around zero since November 2012.
Welcome Madame Chair, here’s a market selloff for you.
Fed Chair Janet Yellen made some news that she didn’t expect yesterday. She perhaps thought she was offering some clarity when she answered the question from Reuters’ Ann Saphir as to when the Fed might start raising interest rates. That’s not how it worked, although at least in this case she didn’t mouth off to Maria Bartiromo the way Ben Bernanke did eight years ago.
December’s last salvo before going into holiday mode was the surprise Federal Reserve decision to trim its monthly $85 billion in bond buying to a more modest (but still enormous) $75 billion, that helped balloon its balance sheet to north of $4 trillion.