Implications for the euro area of divergent monetary policy stances by the Fed and the ECB : monetary dialogue 15 February 2016 : compilation of notes

Confronted with a different macroeconomic and financial environment, the ECB and the Fed monetary stances seem to be more and more on diverging paths. While the Fed has stopped its quantitative easing (QE) operations and has recently decided to raise the target range for the federal funds rate, the ECB is committed to extend the scope of its QE programme launched in March 2015 and does not intend to reverse its zero interest rate policy before 2017. This compilation of notes requested by the Committee on Economic and Monetary Affairs (ECON) for the February 2016 Monetary Dialogue provides an assessment of the main repercussions and risks for the euro area of potentially divergent monetary policies by the Fed and the ECB.