Analysts at Deutsche Bank note that the ECB’s Draghi seemed relatively upbeat yesterday, indicating that “we’re confident that basically thanks to our monetary policy the inflation rate will converge to our objectives“ and that despite heightened global uncertainties, “the risks surrounding the euro area growth outlook remain broadly balanced”.
Key Quotes
“Elsewhere, he reiterated the need to be patient and persistent in the ECB’s policy while warning that the risk now “mainly relate to the threat of increased protectionism”.
“Meanwhile re the issue of reinvestments of maturing debt that the ECB holds as part of QE, the ECB’s Coeure said that neither the Governing Council nor committees have discussed any details of an “operation twist” as he “sees it as a technical discussion, not as a major aspect of monetary policy when it comes to the maturities”.”
“Finally, the ECB’s Nowotny said negative rates can’t be a permanent feature of monetary policy, as it should be applied only as needed.”
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