Some very recent indicators hint at stabilization – I am referring to last week’s growth figures for the United States that were rather strong, and to this week’s Eurostat flash estimate that the Eurozone GDP growth in the first quarter of this year accelerated to 0.4 percent, up from 0.2 in the last quarter of 2018. This is good news, of course.
But in my view we should not jump the gun after the first green shoots and change the course. In policy-making, it is often better to be safe than sorry. This goes certainly for monetary policy. As a consequence of the slowdown, (almost) all major central banks needed to put monetary policy normalisation on hold and instead maintain an accommodative policy stance.