Quantitative easing in the eurozone to the tune of €1.1 trillion has not raised consumer price inflation as the ECB had expected.
But neither bureaucrats nor central planners ever evaluate the effectiveness of their programs. Rather, when something does not work, they do more of it, until it does work, with no regard for the economic bubbles or other negative consequences.
Those expecting more monetary madness were rewarded Thursday when the ECB -- as expected -- opened the door to a December stimulus.
With that, let's take a look at some currency and interest-rate reactions.
German 2-Year Bond Yield
German 2-Year Bond Yield Weekly
Italian 10-Year Bond Yield
Spanish 10-Year Bond Yield
U.S. 30-Year Bond Yield
Euro/Dollar
In Europe, there were large interest-rates swings in nearly every county. In Germany, the move was primarily in short-term durations. In the peripheral countries, the swings were in longer term durations.
In the US, treasury yields declined, but the move was muted.
In Forex, Draghi got an oversized move where he wanted, as the Euro sank vs. the US dollar.
A strong US dollar has hurt US manufacturers so the Fed will likely not be pleased with this competitive currency debasement.
Economic Madness
Quite frankly it's nothing but economic madness to demand consumer price inflation.
Nonetheless, central banks are not only bound and determined to achieve inflation, but are using methods that have failed for decades in Japan and, more recently, in both Europe and the US.