David, ECB, German Government discussed on Bloomberg Markets


Deposit rate these the be announced a while ago that negative forty basis points they were not going to cut spending more and they haven't cut in where the have moved at focused on other measures primarily the purchase of assets or quantitative easing david can you just tell us about the economy let's start with the germany because i understand that they're basically nearfull employment that is true and in fact the the the economy of the european excuse me of your areas a whole is doing rather well we've had zero point five gdp growth for a number of quarters however that is not translating into higher inflation most people would have expected to do so that improved growth will hardly enough for the ecb to taper tacit purchases next year but not enough to actually tighten monetary policy meeting raise rates shrink its balance sheet and these people need to see signs of inflation which it has not yet seen in order to do that but david money if there is an element that is cultural because the german government has spoken many times about trying to increase personal spending and it seems as though that is running up against a cultural proclivity to save money the economy and the consumer in germany and not necessarily the same economy and consumer as in other countries of the world like the united states it is true that savings rates tend to be higher germany and the number of people have tried to put forth theories to why that is and without kind of coming down on the side of the argument of it cultural whatever the fact is savings is higher there and that has limited the amount of demand that is domesticallygenerated which is a persistent complained of germany's trading partners so david i'm looking at eight two year german yield at negative zero point seven percent right now it seems like the market is pretty complacent in pretty much in line with your assessment of not rate hike until twenty nineteen cracked on that is true that yields.

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