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Economy
In reply to the discussion: STOCK MARKET WATCH -- Monday, 19 May 2014 [View all]xchrom
(108,903 posts)27. Draghi Isn’t Doubted as Economists Await ECB Stimulus
http://www.bloomberg.com/news/2014-05-18/draghi-isn-t-doubted-as-economists-await-ecb-stimulus-measures.html
Mario Draghi has left little room for doubt.
Ninety percent of economists in the Bloomberg Monthly Survey predict the European Central Bank president will ease monetary policy in June after saying on May 8 that officials are comfortable with acting then. While that allows investors to prepare for added stimulus and a weaker euro, it also sets them up for a bigger disappointment should he fail to deliver.
Almost a year after Draghi pledged to support the euro-area recovery with low interest rates, the central bank is faced with mediocre economic growth and inflation at less than half its goal. Thats increased the odds policy makers will step up their response with radical measures that could range from negative deposit rates to asset purchases.
Draghi clearly pre-committed, said Elwin de Groot, an economist at Rabobank in Utrecht, the Netherlands. As any other central banker should know, he would risk his reputation, and a significant strengthening of the euro, if the ECB doesnt follow through in June.
In the Bloomberg survey, 47 of the 52 respondents said the ECB will ease policy when the Governing Council meets on June 5 in Frankfurt. A record 88 percent said Draghis guidance on interest rates, made every month since July, has been effective. Thats up from 48 percent in September, when the question was first included in the survey.
Mario Draghi has left little room for doubt.
Ninety percent of economists in the Bloomberg Monthly Survey predict the European Central Bank president will ease monetary policy in June after saying on May 8 that officials are comfortable with acting then. While that allows investors to prepare for added stimulus and a weaker euro, it also sets them up for a bigger disappointment should he fail to deliver.
Almost a year after Draghi pledged to support the euro-area recovery with low interest rates, the central bank is faced with mediocre economic growth and inflation at less than half its goal. Thats increased the odds policy makers will step up their response with radical measures that could range from negative deposit rates to asset purchases.
Draghi clearly pre-committed, said Elwin de Groot, an economist at Rabobank in Utrecht, the Netherlands. As any other central banker should know, he would risk his reputation, and a significant strengthening of the euro, if the ECB doesnt follow through in June.
In the Bloomberg survey, 47 of the 52 respondents said the ECB will ease policy when the Governing Council meets on June 5 in Frankfurt. A record 88 percent said Draghis guidance on interest rates, made every month since July, has been effective. Thats up from 48 percent in September, when the question was first included in the survey.
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