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Draghi: Euro zone will not surrender to low inflation

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 4, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet - ECB chief Mario Draghi in his speech in Germany says that he sees no reason for permanently lower inflation. He also stressed that ECB will not surrender to low inflationary pressures. He however did acknowledge that “There are forces in the global economy today that are conspiring to hold inflation down. Those forces might cause inflation to return more slowly to our objective.” He added "the longer inflation stays too low, the greater the risk that inflation does not return automatically to target."

    Given that low inflation increases real debt burdens, which negatively impacts aggregate demand, monetary policy cannot be “relaxed about aeries of supply shocks”. He assured that the central bank will “act within” the mandate to fulfill its objective of returning inflation to target as soon as possible.
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