The European Central Bank is holding its monthly meeting – an offsite gathering in Cyprus – and is about to commence its quantitative easing bond-buying programme.
Despite the Federal Reserve’s trillions of dollars in newly printed money, workers’ wages and overall U.S. inflation have failed to take off since the recession. Longer-term borrowing costs, from 10-year Treasury yields to 30-year home mortgages, have also compressed without any real signs of reversing. While this has perplexed many economists, transcripts of the U.S. central bank’s crisis-fighting meetings in 2009 show that Janet Yellen, then the head of the San Francisco Fed, was prescient in warning colleagues of these very problems.
Germany’s parliament will vote today on the extension of Greece’s bailout by four months and will duly back it though we can expect some grumbling from a clutch of lawmakers.
Greek Prime Minister Alexis Tsipras will visit Rome for talks with Italy’s Matteo Renzi and will be met there by his finance minister, Yanis Varoufakis, who has already been to London and Paris to try the scope for a new debt deal for Greece and reassure investors that there won’t be a default.
Russia’s central bank meets having shoved interest rates up to an eye-watering 17 percent late last year.
The central bank has said rates can only come down if inflation was trending lower. It was running above 11 percent last month and the government expects it to peak at 17 percent.
Britons are becoming no clearer about the outlook for their economy, if the latest Citi/YouGov survey of inflation expectations is anything to go by.
Just as ECB President Mario Draghi announced a massive bond-buying program to revive Europe’s economy and fend off deflation fears, news of shockingly low inflation popped up elsewhere in the globe: consumer prices in Mexico dropped 0.19 percent in early January, far below all 19 forecasts in a Reuters poll.