Expert insight

Fed status quo may constrain ECB’s monetary options

April 24, 2024

Jumana Saleheen

Vanguard Chief Economist, Europe

A line chart showing the midpoint of the U.S. federal funds rate and the European Central Bank deposit rate since 2000. For much of the period shown, the ECB rate followed the path of the federal funds rate, usually with a lag. A divergence occurred from roughly 2016 through 2019, when the ECB maintained negative rates even as the Federal Reserve hiked rates by more than 2 percentage points.
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