Columbia Threadneedle: Lagarde more 'hawkish' than expected
Columbia Threadneedle: Lagarde more 'hawkish' than expected
Dave Chappell, Fixed Income Portfolio Manager at Columbia Threadneedle, comments on yesterday's ECB meeting:
'The ECB delivered a 50bp hike as widely expected, but the tone of both the statement and Lagarde, during the press conference, was somewhat more hawkish. Interest rates to ‘rise significantly’ suggested that future hikes could remain at the current size, and there was little push back to this from the President, although data dependency would shape the future path of rates.
Quantitative tightening will begin via ceasing to reinvest some of the maturing bonds from the beginning of March, and the pace of approx. Eur15 billion per month of roll off would be re-evaluated at the end of the second quarter. Bond yields rose on the news, and periphery bonds underperformed, as a less supportive central bank approach comes into view.'
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