Draghi speaks in Milan
- Destabilising consequences can arise from deflation
- ECB has a high degree of independence
- ECB must consider whether a weaker global environment impacts ability to return to price stability
- ECB has always acted within its mandate and treaty limit
- Without a doubt, QE has been effective to date
- ECB has many tools at its disposal
- ECB must consider whether QE can counter global headwinds
That's a huge point and one we've raised before. QE is supposed to get the domestic economy firing but it can't do anything against external risks, save giving a country a better competitive edge via a lower currency. This point is going to be big in the Dec ECB meeting as it could be the deciding factor between doing more QE or using other tools like negative rates
