ECB's Lane is a speaking and says:
- The typical length and monetary transmission mean that full economic impact of tightenings over the last year will only play out over the next couple of years
- In relation to the banking channel, transmission will continue to strengthen with ongoing repricing of bank funding, while the repricing of maturing fixed rate loans will place further upward pressure on aggregate lending rates
- Any deterioration in the macroeconomic environment would also reinforce the banking channel by reducing loan demand and increasing credit risks
- In combination with broader banking, financial and economic incoming data, the July BLS will help us to update our assessment of the banking channel of monetary policy tightening
- In particular, as cumulative tightening in monetary policy gains further traction, the countervailing impact of these factors will plausibly decline, with fading profits or a slowdown in household incomes amplifying the impact of the credit channel
Comments are like an economics course at University.
Meanwhile the EURUSD is not trading at a new high for 2023 after reaching 1.1100. That took out the April 2023 high at 1.1095.The EURUSD is trading at the highest level since March 31, 2022
