Many battles have been won by generals who convinced their opponents their army was much larger and much more powerful than it truly was.
Draghi is working in that grey area. He never showed his hand by hinting at more action but kept the possibility on the table, and even advanced it a bit.
Draghi showing off his wedding ring
He hinted at unconventional measures but let slip the difficulty and financials risks of implementing it.
The market wanted a green light to buy euros but you can’t help but be scared of a move as soon as next month if the inflation numbers disappoint.
Draghi said the discussion at the meeting was about whether the medium term outlook for inflation had deteriorated and by the sounds of his comments, it had. But not yet enough to do anything about it and most of the Governing Council believes it’s mostly due to base effects. But they’re not sure and could be swayed by a soft round of data.
Upcoming eurozone inflation numbers will be extremely important.
