> Hmmm ... not a "loose policy", but short term rates are much lower in EU
> than US -- 2.45% vs 4.82% for 3 month interbank money as I type. At the
> long end, it's less clear -- 5.25% EU vs 5.92% US. But that seems to me a
> reflection of poor credibility on the part of the EU rather than any signs
> of incipient inflation (of which there are none). And that would suggest
> that the long end will come down over time, as the hard money nuts at the
> ECB begin to show their colours. So I'd say that, since the ECB is not
> actually choking recovery in the EU, it would count as a "loose policy".
>
>
According to my Economist, year-on-year CPI inflation is 1.1% in the Eurozone versus 2.3% here in the States. That would make real short-rates 1.35% vs. 2.52% respectively. Difference is not so huge.
And lest we forget: The US is at full employment!!! Thanks to zero real interest rates earlier in the decade, our U is 4.2%: we've cruising through an expansion for 8 years. Europe has 10% unemployment thanks to crushingly high interest rates throughout a recession from which it is only beginning to emerge.
No, I think you could not describe that monetary policy as "loose."
Seth
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