ECB: Keep the Sequencing, Tweak The Guidance
The ECB has provided clear indications regarding its policy framework until the end of 2017. However, speculation is mounting about the Governing Council’s intentions to make changes. In particular, press reports suggest that the ECB is considering the idea of changing the sequence of its exit strategy (by raising rates before QE is finished) or, at least its plans for future guidance. In this paper we discuss what the ECB will likely do in coming weeks and months, on forward guidance, interest rates and QE.