- if recent oil prices are taken into account then inflation would be substantially lower than staff projections so far
The ECB
can’t simply look through oil price decline
ECB’s Peter Praet in a newspaper interview with Boersen-Zeitung published a short while ago on Bbg
- if there was some interest rate margin left then there would have been a unanimous decision to cut rates at the last ECB meeting
- are closely monitoring how the outlook for price stability is evolving in context of fall in oil prices
- there is a risk that we won’t have achieved the degree of monetary accommodation that we had intended
- there has been no decision on how to deal with risk sharing in case of large scale govt bond purchases
- sovereign bonds are the only security that has significant market volume, not too much to buy on corp bond market
The chief economist of the ECB and executive board member illustrating the rock and hard place position in which they find themselves and seemingly more concerned about the negative impact of oil price falls than the BUBA’s Weidmann
ECB’s Praet – concerns over impact of oil price fall
