A source cited by Reuters says Draghi sees no deflation scenario. It’s a common refrain from the ECB.
- Sees continued problem of low inflation in the eurozone
- Quantitative easing is still a way off
Draghi spoke earlier in a closed session and these comments are likely from there.
It’s part of the trend of ‘make believe central banking’ where officials repeatedly publicly push agendas in hopes of influencing consumer behavior. In this case, the ECB believes that by saying ‘there is no chance of deflation’ often enough that it will lower the chance of deflation. Privately, they are worried.
The bolded comment is giving the euro a slight lift. Last at 1.3844.
More comments:
- Draghi does not expect major unpleasant surprises from bank stress tests
- Sees positive signs in the eurozone economy but growth remains fragile
The comment on the stress tests is notable, the tests could be a catalyst for investment in eurozone financials.
