ECB Announces It Will Continue to Support the Economy

ECB announces that it will continue to support the economy. The increase in bond yields also stimulated the ECB.

European Central Bank (ECB) Board member Isabel Schnabel stated that if growth is negatively affected by the rise in government borrowing costs, they may have to implement additional monetary policies to support the economy. Speaking at a virtual conference on Friday, Schnabel said, "Although the rise in long-term bond yields at the beginning of the economic recovery reflects positive prospects for growth, it could pull back policy support too early and drastically. In this case, the level of supportive policies may need to be raised again.”   Federal Reserve Also Delivered Comforting Messages Prior to the rise in bond yields on Thursday, FED Chairman Richard Clarida made statements that the markets were "pricing a more favorable outlook for the US economy" and "seeing credibility for the FED's inflation target of 2 percent". Clarida had predicted that the FED would continue its asset purchases of 120 billion dollars per month this year. Atlanta FED Chairman Raphael Bostic pointed out the weakness in the employment market and emphasized the importance of the monetary policy to remain expansionary, said, "Let me remind you that the FED's goal is full employment." New York FED Chairman John Williams, on the other hand, stated that inflation will remain under pressure for a while and stated that the rising bond yields are "probably a good sign".       Source: Bloomberg HT