ECB: No sufficient reasons to move now

Research Team at Rabobank, suggests that on the expected lines, the ECB kept all its policy settings unchanged today and it seems to have become a customary thing now, this was communicated with the release of a short statement.

Key Quotes

“The main rationale for this unchanged policy stance was that whilst the risks to the economic outlook remained tilted to the downside and its GDP projections by the ECB staff were revised downward, these adjustments were insufficient (in Draghi’s words: “for the time being the changes are not substantial enough to warrant a decision to act.”) The staff projections for inflation were largely unchanged and is “broadly following the baseline scenario”, although Draghi conceded that “it will take a little longer” for inflation to reach its target.

The ECB still has full confidence in the beneficial effects of its policy measures; Mr. Draghi highlighted that although developments in bank credit continue to reflect their lagged relationship with business cycle “[...] monetary policy changes are increasingly filtering through to firms and households.”

President Draghi was again relatively tight-lipped, albeit not as much as in July. Altogether, the underlying tone struck by Draghi in this press conference was dovish. Especially the fact that Mr. Draghi cited comments by Peter Praet: “[…] underlying inflation pressures continue to lack a convincing upward trend and its future path is conditional upon our very accommodative policy stance.”

Indeed, we believe that the real reason why the Governing Council did not want to act now was because it wants to think more thoroughly about a medium term action and communication plan so as to prevent a repeat of last year.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.