Bancos centrales

• EU governments are not matching the ECB's efforts

• EU fiscal response to the crisis is inadequate

• Not opposed to increasing PEPP size, but decision should be based on data

• No urgency to increase purchases, must examine how easing of lockdown measures are impacting the economy

CNBC reports that according to Deputy Governor for Monetary Policy Ben Broadbent, the U.K. may be headed toward negative interest rates at impending Bank of England monetary policy meetings.

The BOE's Monetary Policy Committee (MPC) voted to hold interest rates at a historic low of 0.1% last Thursday, having cut rates twice from 0.75% since the start of the coronavirus pandemic.

"The committee are certainly prepared to do what is necessary to meet our remit with risks still to the downside," Broadbent told CNBC on Tuesday.

"Yes, it is quite possible that more monetary easing will be needed at the time."

Along with the two previous rate cuts, the Bank has also announced £200 billion of new quantitative easing, bringing its bond buying program to a total of £645 billion.

• ECB measures form a powerful package

• Rating downgrades may be a risk to policy discussion

• ECB has not discussed impact of rating downgrades on purchases

• We will continue to come up with appropriate responses

• BOE is clearly committed to take action when needed

• Appropriate that BOE continues with aggressive pace of QE for the moment

• We will take stock of that, there's still another meeting before QE completion

• Information about lifting lockdown measures will be material to June discussions

• ECB constantly monitoring the situation

• ECB policy has provided crucial support to the economy

• Inflation will likely fall further in the next few months

• PEPP helping to forestall undue tightening of financial conditions

• Fiscal actions are the first line of defense

• The Bank of England's Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. In that context, its challenge is to respond to the severe economic and financial disruption caused by the spread of Covid-19.

• At its meeting ending on 6 May 2020, the MPC voted unanimously to maintain Bank Rate at 0.1%.

• The Committee voted by a majority of 7-2 for the Bank of England to continue with the programme of £200 billion of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, to take the total stock of these purchases to £645 billion.

• Two members preferred to increase the target for the stock of asset purchases by an additional £100 billion at this meeting.

• The spread of Covid-19 and the measures to contain it are having a significant impact on the United Kingdom and many countries around the world.

• Activity has fallen sharply since the beginning of the year and unemployment has risen markedly.

• Economic data have continued to be consistent with a sudden and very marked drop in global activity.

• Oil prices have been volatile.

• There have, however, been tentative signs of recovery in domestic spending in China, and this is likely to be echoed in other countries that have started to relax Covid-related restrictions on economic activity.

• Financial markets have recovered somewhat over recent weeks and risky asset prices have picked up from their lows in mid-March. This in part reflects the actions taken by authorities in the United Kingdom and elsewhere. Global financial conditions have, nevertheless, remained tighter than prior to the outbreak of Covid-19.

• The timeliest indicators of UK demand have generally stabilised at very low levels in recent weeks, after unprecedented falls during late March and early April.

• Payments data point to a reduction in the level of household consumption of around 30%.

• Consumer confidence has declined markedly and housing market activity has practically ceased.

• CPI inflation declined to 1.5% in March and is likely to fall below 1% in the next few months, in large part reflecting developments in energy prices.

• ECB needs to discuss how to offer certainty to the court

• ECB hasn't yet discussed whether to buy junk bonds

• Germany is in a severe economic recession

• Economy can recovery sustainably once the pandemic has been overcome

• Should not lose sight of eventual exit from stimulus measures

• 2020 GDP growth forecast -5.5% (previously +1.1%)

• 2021 GDP growth forecast +4.3% (previously +1.2%)

• 2022 GDP growth forecast +1.7% (previously +1.4%)

• 2020 inflation forecast +0.4% (previously +1.2%)

• 2021 inflation forecast +1.2% (previously +1.4%)

• 2022 inflation forecast +1.4% (previously +1.5%)

• Euro area real GDP could fall by around 5% (mild scenario), 8% (medium scenario), and 12% (severe scenario) this year

• Under the severe scenario, Q2 quarterly real GDP growth could be -15%, followed by a protracted and incomplete recovery; +6% in Q3, +3% in Q4

• Under the severe scenario, real GDP is expected to remain well below the level observed at the end of 2019 until the end of 2022

• BOJ will ease further without hesitation if needed

• Expects impact of the virus outbreak to weaken in 2H 2020

• Risks are tilted to the downside

• Once the virus is contained, the economy will start recovering

• Uncertainty is high with regards to the timing on when the virus outbreak will end

• There is no change in the BOJ's stance to achieve 2% price target

• Price momentum has been lost for now

• Prices are unlikely to meet 2% target during forecast period

• Expects monetary easing to have synergy with government's fiscal policy

Bloomberg reports that Bundesbank President Jens Weidmann praised euro-area governments for providing "significant, impressive" spending in the fight against the coronavirus, but warned that they'll need to tighten their budgets once the emergency has passed.

The German central banker told Bloomberg in an interview by email that the economy will need broad support for some time. He also argued that "the pandemic plainly shows how important a solid fiscal policy is."

"An extremely expansionary fiscal stance cannot be sustained permanently," he said. "Going forward, then, all countries will have to focus on reducing the very high debt ratios and ensuring acceptance in the capital markets, and to do this in a way that is compatible with our fiscal rules."

The comments strike at the heart of the debate over how Europe should handle the aftermath of the coronavirus, with governments across the 19-nation bloc pledging hundreds of billions of euros to support small businesses and compensate for lost wages.

"It is not yet possible to say for sure whether the measures taken to date will be enough," said Weidmannl. "Monetary policy is making a major and important contribution within the scope of its mandate, and will continue to play its role."

• Doesn't expect a V-shaped recovery

• Expects something more like negative quarters of growth this year, then gradual return to positive growth next year

• It will take time for governments to lift restrictions and people to regain confidence

• Uncertainty is the central issue surrounding the economy's future

• Fed is committed to near-zero rates until after the crisis passes

• Until price pressures move higher and unemployment data reverse its course