ECB Calls for Faster Money Printing; Americans to Start Receiving Stimulus Checks This Weekend
A “significant” bullish sign for risky assets, including Bitcoin, which is nearing its ATH yet again.
Just as the Bitcoin price gained momentum amidst the risk-on sentiments in the financial markets, the central banks gave signals to continue the ‘up only’ scenario.
The European Central Bank signaled on Thursday that it would accelerate money printing to keep a check on eurozone borrowing costs.
Concerns regarding the rise in bond yields are growing everywhere, and while the Federal Reserve isn’t really troubled by them, running the same dovish script, ECB is ready to act with its 1.85 trillion Pandemic Emergency Purchase Programme (PEPP).
The policymakers had set a monthly target to use its PEPP more generously over the coming months but aren't disclosing it, reported Reuters. Apparently, purchases could be well above the 60 billion euros of bonds the ECB was doing last month but not as high as 100 billion euros a month from the spring of 2020. The ECB said in a statement after its regular policy meeting,
“The Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year.”
ECB President Christine Lagarde said the council was in “total consensus.”
The growth in the eurozone is actually currently weaker than forecast as a new wave of coronavirus pandemic requires longer lockdowns. Lagarde told a news conference,
“While the overall economic situation is expected to improve over 2021, there remains uncertainty surrounding the near-term economic outlook, relating in particular to the dynamics of the pandemic and the speed of vaccination campaigns.”
She further said the eurozone economy is likely to contract again in the first quarter of this year, stressing the patchiness of any signs of recovery and keeping the longer-term inflation outlook unchanged below its target of close to 2%.
In the US meanwhile, President Joe Biden has signed the $1.9 trillion pandemic-relief bill into law, and some Americans will start receiving new stimulus checks as soon as this weekend.
“People can expect to start seeing direct deposits hit their bank accounts as early as this weekend,” White House press secretary Jen Psaki Psaki said at a press briefing.
“This is, of course, just the first wave,” Psaki added, “payments to eligible Americans will continue throughout the course of the next several weeks.”
The bill involves direct payments of up to $1,400 and extending a $300 per week unemployment insurance boost until Sept. 6.
This Biden said is about “rebuilding the backbone of this country” and giving the working people, the middle-class folk, “a fighting chance.”
As a result, S&P500 made a new all-time high, and Bitcoin is trading above $55,000, aiming for a new ATH as well with Ether around $1,800. Gold meanwhile continues to feel down around $1,700.
“The announcement from the White House is very significant for risk assets in general, and crypto-assets specifically,” said Simon Peters, an analyst at eToro, adding that the “floodgates” are now open in terms of new liquidity.