ECB’s Constancio – No one knows how far is too far for negative rates

ECB’s Vitor Constancio, while speaking in New York, said no one knows how far negative rates could go while adding that low rates are primarily implemented to impact and lower short end rates (short duration bond yields).

He further stated that markets are signaling lack of trust in growth and inflation; something the ECB will take into consideration.

Constancio also said inflation would have been much lower if it were not for ECB’s measures.

Key Quotes

ECB may decide to act if we feel inflation's rise is delayed

Basic assessment at the March meeting will hinge on reaching our inflation goal

ECB not trying to build up expectation ahead of March policy