- To see if Inflation has bottomed out
- If levels of inflation continue below 1% then ECB forecast of inflation returning to target will be brought into question
- ECB did not give timeframe over when ECB might take action
- Next ECB staff projections will consider whether March’s low inflation affects ECB’s medium term forecast
- Draghi’s personal credibility is not at stake, it is very high
- Did not discuss details of QE at meeting
- April meeting was about reaching general view, very important there was unanimity
- Did not discuss whether ECB would buy government bonds or private assets under QE
Bold 1.That’s potentially bearish news if they revise down inflation forecasts but would depend on how much.
Bold 2. That’s the other issue that’s currently a fly in the ointment of EU QE, what to buy and who to buy it from. QE in Europe is a whole different kettle of fish to Japan, US and UK by demographics alone
