This blog is devoted to evaluating vulnerable Democratic candidates, political news, law and current affairs. Author is a Political consultant specializing in opposition research for conservative candidates, attorneys and PACS at the local, state, and federal level.
“The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government - lest it come to dominate our lives and interests.”
― Patrick Henry
Specifically, the ECB cut the deposit rate to -0.1%, from 0.0%, effective June 11.
This is a historic development, as it’s the first time a major central bank has cut any main interest rate to negative in a bid to spur lending and spending.
The idea is that if banks aren’t being rewarded with a good deposit rate by parking their reserves at the central bank, then they will be more likely to lend it to households and businesses.
This development, while perhaps something new in a de jure kind of way, is really not a significant change in the de facto status quo in which central banks, most notably the ECB and the Fed, are continually seeking to jumpstart economies by inflating the money supply. Of course, they’ve been trying to jumpstart things for nearly six years, but surely this latest move will work like a charm.