Vítor Constâncio

Vítor Constâncio witnessed firsthand severe recessions, inflationary bouts, and a global financial crisis, as former Vice President of the European Central Bank (ECB) (2010 to 2018) and Governor of The Bank of Portugal (1985-1986, 2000-2010). He brings this considerable experience to examine the current challenges facing central bankers at the ECB as well as the Fed.Constâncio argues that while U.S. inflation is driven by a strong demand generated by loose fiscal policy, the primary agent of European inflation was the surge in energy prices in 2022. However, he recognizes that what began as supply-side pressure has broadened out to other sectors of the Euro area economy, so the ECB’s hiking of interest rates to 4% was necessary. Constancio expects that a mild recession in Europe will tame inflation and that substantial further rate hikes from the ECB will likely not be needed. Filmed on July 6, 2023.____Follow Vítor Constâncio on Twitter https://twitter.com/VMRConstancioFollow Jack Farley on Twitter https://twitter.com/JackFarley96Follow Forward Guidance on Twitter https://twitter.com/ForwardGuidanceFollow Blockworks on Twitter https://twitter.com/Blockworks_____Use code GUIDANCE20 to get 20% off Permissionless 2023 in Austin:https://blockworks.co/event/permissionless-2023Research, news, data, governance and models – now, all in one place. As a listener of Forward Guidance, you can use code GUIDANCE10 for a 10% discount when signing up to Blockworks Research https://www.blockworksresearch.com/____Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:https://rb.gy/5weeywMarket commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos____Timecodes:(00:00) Introduction(00:48) Euro Area Inflation Is Mostly Due To Energy Shock, Not Demand(08:13) I Would Support A Pause In Interest Rate Hikes, Says Constancio(10:11) Recession In Europe Is Likely For 2023(14:35) ECB Unlikely To Cut Interest Rates During A Mild Recession(16:20) There Pressure on The European Central Bank (ECB) To Follow The Federal Reserve?(20:44) Exploring The Logic Of Negative Interest Rates(25:29) Interest Rates' Impact On The Economy(32:04) Fixed vs. Floating Mortgages(34:48) ECB's Reaction Function During The 2008 Great Financial Crisis(44:16) Recent Bank Failures (Silicon Valley Bank)(49:51) Credit Suisse(51:51) Basel III Regulation of Held-To-Matuity Accounts and Interest Rate Hedging(54:47) Fighting Inflation In 1970s Portugal____Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

Vítor Constâncio, the former vice president of the European Central Bank and current professor at IE University, shares his insights on a historic shift in European fiscal policy. He discusses a groundbreaking 750 billion euro recovery fund meant to support struggling countries and the significant implications for macroeconomic stability. Constâncio also highlights the evolving role of central banks in a crisis, the interplay with fiscal measures, and the challenges posed by inflation in a new economic landscape.