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Draghi says inflation to turn negative and pick up only in late 2016

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - Draghi says the current monetary policy is working. He stated that the bank’s asset purchase are proceeding smoothly and that it’s clear that monetary policy measures introduced since mid-2014 are working.

    He says the ECB expects the bank’s interest rates to remain at current or lower levels for an “extended period.”

    He acknowledged that downside risks increased. He noted the volatility in financial and commodity markets and the geo-political crisis will keep posing threat to euro area growth. Inflation he said will remain very low and will pick up only later in 2016. Inflation dynamics are weaker than expected, Draghi observed.

    Draghi signals that the ECB will review and “possibly reconsider” its policy stance at its next meeting as global market turmoil raises downside risks. Draghi expressed concern the inflation outlook and signaled that more quantitative easing might be in store when the central bank meets in March.
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