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2 Jun 2015
ECB’s tapering still ‘off the table’ – Rabobank
FXStreet (Edinburgh) - Elwin de Groot, Senior Eurozone Strategist at Rabobank, gave his views on the idea that rumours on ECB tapering could gain traction once again.
Key Quotes
“In short, we view the recent rise in inflation as a mixed blessing and no reason for the ECB to start a discussion about tapering its Extended Asset Purchase Program”.
“This also fits with the discussion held during the previous monetary policy meeting”.
“Whilst the Council, according to the Monetary Policy Accounts of that meeting, discussed the positive impact QE and its other policy measures had had on financial markets (which were also seen filtering through to the economy in the form of improving credit flows, strengthening confidence and consumption and higher inflation expectations), they underscored the need to complete the purchase program”.
“There was also acknowledgement that there is still considerable slack in the economy and that, although downside risks had diminished, these had not completely disappeared”.
“All in all, we expect an upward revision in the ECB’s 2015 inflation forecast, but updated growth projections to remain close to those made in March. Meanwhile, Draghi will stick to his plan. He hasn’t got much of a choice”.
Key Quotes
“In short, we view the recent rise in inflation as a mixed blessing and no reason for the ECB to start a discussion about tapering its Extended Asset Purchase Program”.
“This also fits with the discussion held during the previous monetary policy meeting”.
“Whilst the Council, according to the Monetary Policy Accounts of that meeting, discussed the positive impact QE and its other policy measures had had on financial markets (which were also seen filtering through to the economy in the form of improving credit flows, strengthening confidence and consumption and higher inflation expectations), they underscored the need to complete the purchase program”.
“There was also acknowledgement that there is still considerable slack in the economy and that, although downside risks had diminished, these had not completely disappeared”.
“All in all, we expect an upward revision in the ECB’s 2015 inflation forecast, but updated growth projections to remain close to those made in March. Meanwhile, Draghi will stick to his plan. He hasn’t got much of a choice”.