Reliable surveys confirm the Euro Zone economy is not recovering.
The record low German unemployment rate does not reflect a truly tight supply of labor.
Practically speaking, no one should expect any ECB tightening at all until some time in 2022.
Euro Zone banks are not to responding to the ECB’s generous boost to liquidity by increasing their lending.
The problem with the recovery from the global financial crisis is not just lower growth rates, but still-depressed levels of activity.
The ECB’s plan for ending asset purchases hinges on a questionable CPI forecast.
It is both cheap and easy to blame the Q1 slowdown on bad weather. The real culprit is credit.
Contrary to popular belief, we do not hate Markit or its PMIs. We just do not trust them to inform us about what the economy is up to.
How much do changes in oil prices and exchange rates affect inflation? Not much.
Our bet is that the ECB will maintain accommodative monetary conditions into 2019 at least.