ECB's Rehn says it's better to overshoot on stimulus than undershoot

Author: Adam Button | Category: Central Banks

The Bank of Finland governor in the WSJ

The Bank of Finland governor in the WSJ
  • "It's important that we come up with a significant and impactful policy package in September"
  • "When you're working with financial markets, it's often better to overshoot than undershoot, and better to have a very strong package of policy measures than to tinker"
The problem with advertising that you want to beat expectations is that a statement like that makes expectations more aggressive, so you risk falling short.

The euro is at session lows on the headlines, down 20 pips to 1.1118. The market now putting a slightly better than 50% chance on a 20 basis point cut, rather than the now-standard 10-bps move.
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