Similar to the US the ECB Has a Credibility Problem

The ECB, led by Christine Lagarde, is currently struggling with a credibility issue. While Fed Chair Jerome Powell needed almost a year to convince markets of his seriousness about rate hikes. Lagarde has tried to impose her intentions onto the market, resulting in policy inconsistencies. The ECB’s Transmission Protection Instrument (TPI), designed to manage German/Italian credit spreads, has not been enough to stabilize the situation. In short, both the US and ECB are dealing with economic uncertainties due to their conflicting monetary policies.