Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

ECB ready to ease again as inflation goal is 'some distance away'

EconomyJul 11, 2019 08:21AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Francesco Canepa

FRANKFURT (Reuters) - European Central Bank policymakers gathering last month agreed on the need to be ready to provide more stimulus to the euro zone economy in an environment of "heightened uncertainty", an ECB account of the meeting showed on Thursday.

With a trade war between the United States and China hurting euro zone exporters and the Federal Reserve widely expected to cut its interest rate, the ECB is coming under pressure to ease its own policy again.

The bank's Governing Council put off any rate hike for at least a year at its June 5-6 meeting and President Mario Draghi emphatically opened the door to more stimulus in the following weeks.

The account of the meeting suggests there was already "broad agreement" on the matter last month and a rate cut, a new change to the ECB's policy guidance and even new asset purchases were all on the table.

"There was broad agreement that, in light of the heightened uncertainty, which was likely to extend further into the future, the Governing Council needed to be ready and prepared to ease the monetary policy stance further," the ECB said in its account of the meeting.

The account also showed that the ECB was considering "more strategic" moves if inflation remained low and that it planned to emphasize that it would tolerate an overshoot as well as an undershoot of inflation compared to its target of just under 2 percent.

Policymakers deemed annual price growth of 1.6 percent currently forecast for 2021 to be "some distance away" from that goal and said there was "no room for complacency" in the face of plummeting inflation expectations on financial markets.

The most widely watched market gauge of long-term inflation expectations in the euro area - the so called five-year, five-year forward - was predicting price growth of just 1.2 percent.

Speaking in Frankfurt just before the account was published, ECB board member Benoit Coeure said the pessimism implied such instruments should be taken as a pinch of salt and estimates by professional forecasters and households were more benign.

"The pessimism priced into bond markets today may not necessarily presage downward pressure on inflation tomorrow – at least not to the same extent," Coeure said.

The ECB's Governing Council is due to meet again to discuss monetary policy on July 24-25.

ECB ready to ease again as inflation goal is 'some distance away'
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email