(Bloomberg) -- The European Central Bank announced in June that it will soon be bringing its asset purchase program to an end and also hinted that the first rate hike will come after summer 2019. Bloomberg Economics’ estimates of the neutral policy stance suggest the following one shouldn’t be too far behind as monetary policy is looser than called for at this stage of the economic cycle. Given the enormous stock of asset purchases, the refinancing rate might need to be 1.25 percentage points higher to keep the economy on trend. If the stance of policy prompts overheating, the ECB may find it has some catching-up to do, according to BE.
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