According to the European Central Bank’s (ECB) September policy meeting, restating of the quantitative easing (QE) was opposed by a number of members who argued that it should be a last resort instrument.
The EUR/USD pair seems to be ignoring the ECB’s statement as it continues to move near the three-week high that it set near the 1.1030 handle. Below are some additional takeaways, per Reuters.
“QE opponents said it was not an efficient instrument given already low yields.”
“Some argued that an open-ended QE could push the ECB into bigger purchases, challenging purchase limits.”
“Some policymakers were ready to support a 20 basis point rate cut if the package excluded QE.”
“Number of reservations were expressed about tiering.”
“QE had a clear majority, tiering had a majority, 10 bps rate cut had a very large majority.”
“All policymakers agreed on the need for further easing.”
“Some questioned growth forecasts, calling them still too optimistic.”
“The ECB’s projections were based on an orderly Brexit.”
“The deflation risk is absent, caution was expressed about the emphasis on market-based inflation expectations.”