ECB Inaction Suggests Policy May Be Reaching Its Limits: Scotia
(Bloomberg) -- The ECB’s decision to set up committees to look at options on QE raises concerns that it may be difficult to run the program even as far as March 2017, ScotiaBank strategist Frederic Pretet writes in e-mailed comments.
- These decisions could already be creating tensions inside the board, adding to the risk of paralysis and that the ECB policy is close to its limit
- The lack of actions despite downward revisions to GDP and inflation forecasts is a shift relative to past experiences; that creates a risk the ECB is seen as “giving up on the objective,” leading to a further unanchoring of inflation expectations
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HALISTER1Source: BFW (Bloomberg First Word)
Tickers 2539Z GR (European Central Bank)
People Frederic Pretet (Bank of Nova Scotia/The)
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