Draghi Q&A: The protracted slowdown in the eurozone economy is more marked than expected

Author: Adam Button | Category: Central Banks

Draghi answers questions for reporters

Draghi answers questions for reporters

  • Persistence of downside risks was a factor in the decision
  • Probability of a hard Brexit has gone up lately
  • Baseline doesn't include trade tensions escalation
  • There is no more calendar dependence, this should offer a clear guidepost
  • There was a unanimous consensus, mainly that fiscal policy should become the main instrument (crowd laughs)
  • It's high time for fiscal policy to take charge
  • There was broad consensus on most monetary measures
  • There were more diverse views on QE but the consensus was so broad there was no need to take a vote
  • There was broad consensus forward guidance, rate cut, reinvestments and TLTRO
  • There was unanimity on the need to act
  • One reason to act now was that inflation expectations are re-anchoring at 1.0%-1.5%
  • Draghi says ECB has QE headroom for quite a long time
  • We believe this package is sufficient to re-anchor inflation expectations
  • There is no appetite to change limits on QE
  • We didn't discuss higher QE monthly purchases
Responding to Trump's tweet, he said they don't target exchange rates and have a mandate on price stability.

The euro held last week's low on the first test. Most of the main headlines are out now, look for a further move once the press conference ends.

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