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21 Apr 2016
ECB still on high alert and unaffected by German criticism - ING
Carsten Brzeski, Chief Economist at ING, affirms that the press conference of Mario Draghi implicated that the European Central Bank is still on high alert and willing to implement more stimulus if necessary and that the central bank is not willing to alter its policies as a result of German criticism.
Key Quotes:
“As expected, the ECB did not announce any new measures at its latest press conference, but sent a clear dovish signal, keeping the door open for additional easing in the future.”
“The ECB’s macro-economic assessment remained unchanged from the March meeting.”
“Interestingly, ECB president Draghi sounded more optimistic about the pass-through of monetary stimulus through the banking sector, referring to the latest Bank Lending Survey. Nevertheless, the outlook for both growth and inflation is still shaky and uncertain enough for the ECB to stay on high alert.”
“As regards helicopter money, Draghi shot down any helicopter some market participants might have seen (or wished to have seen) in recent weeks. According to Draghi, the ECB had never discussed the concept of helicopter money.”
“All in all, there are two key take-aways from today’s ECB meeting: first of all, the ECB is still on high alert and would be willing to implement even more stimulus if the recovery falters or low inflation leads to negative second round effects (even though it’s unclear what these measures would really be). And, secondly, the ECB does not look willing at all to alter its monetary policies as a result of German criticism. German has become a fact of life but it will not change the ECB’s life.”
Key Quotes:
“As expected, the ECB did not announce any new measures at its latest press conference, but sent a clear dovish signal, keeping the door open for additional easing in the future.”
“The ECB’s macro-economic assessment remained unchanged from the March meeting.”
“Interestingly, ECB president Draghi sounded more optimistic about the pass-through of monetary stimulus through the banking sector, referring to the latest Bank Lending Survey. Nevertheless, the outlook for both growth and inflation is still shaky and uncertain enough for the ECB to stay on high alert.”
“As regards helicopter money, Draghi shot down any helicopter some market participants might have seen (or wished to have seen) in recent weeks. According to Draghi, the ECB had never discussed the concept of helicopter money.”
“All in all, there are two key take-aways from today’s ECB meeting: first of all, the ECB is still on high alert and would be willing to implement even more stimulus if the recovery falters or low inflation leads to negative second round effects (even though it’s unclear what these measures would really be). And, secondly, the ECB does not look willing at all to alter its monetary policies as a result of German criticism. German has become a fact of life but it will not change the ECB’s life.”