{"id":2523,"date":"2008-01-23T11:56:51","date_gmt":"2008-01-23T11:56:51","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2523"},"modified":"2025-03-27T15:48:34","modified_gmt":"2025-03-27T15:48:34","slug":"economic-indicators-still-suggesting-mpc-ecb-caution","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2523","title":{"rendered":"Economic indicators still suggesting MPC \/ ECB caution"},"content":{"rendered":"<p>The MPC voted 8-1 for unchanged rates at this month&rsquo;s meeting, a less dovish outcome than forecast by my <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2008\/1\/7\/mpc-ometer-february-cut-favoured.html\">MPC-ometer<\/a>. However, the minutes suggest greater concern about a weakening economy than poor near-term inflation prospects, while some members appear to have delayed voting for a cut in order to avoid back-to-back moves and because of the imminent February forecasting round. A reduction looks highly likely next month but economic and financial indicators would have to deteriorate dramatically over the next two weeks to generate an MPC-ometer forecast of a 50 bp move. <\/p>\n<p>The Eurozone purchasing managers surveys weakened slightly further in early January &ndash; see chart. Feeding the relevant components into my ECB-ometer model produces an average interest rate recommendation of -2 bp for the February ECB meeting &ndash; consistent with a shift to a mild easing bias but insufficient to generate a forecast of an actual rate cut (see <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2008\/1\/17\/ecb-ometer-still-suggesting-neutral-stance.html\">here<\/a> and <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2007\/11\/26\/ecb-ometer-suggesting-shift-to-neutral-policy-stance.html\">here<\/a> for more explanation of the model). The Governing Council is likely to issue a more balanced policy statement at the next meeting but it may be several months before a consensus forms in favour of lower rates. <\/p>\n<p>Of course, both the MPC and ECB could be forced to accelerate action if equity markets continue to spiral lower. <\/p>\n<p><span class=\"full-image-float-none\"><img decoding=\"async\" style=\"width: 498px; height: 299px\" alt=\"EurolandGDPNewBusiness.jpg\" src=\"\/storage\/EurolandGDPNewBusiness.jpg\" \/><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The MPC voted 8-1 for unchanged rates at this month&rsquo;s meeting, a less dovish outcome than forecast by my MPC-ometer. However, the minutes suggest greater concern about a weakening economy than poor near-term inflation prospects, while some members appear to have delayed voting for a cut in order to avoid back-to-back moves and because of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2523","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2523","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2523"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2523\/revisions"}],"predecessor-version":[{"id":4832,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2523\/revisions\/4832"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2523"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2523"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2523"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}