However, the inflation picture continues to be problematic for the ECB. Draghi again emphasized that the central bank needs to have sufficient assurance inflation is converging to the ECB’s target in the medium-term, before it changes policy. Such assurance is currently missing. Draghi said he found it very difficult to see a scenario, where the ECB would hike rates this year. He hinted he still did not expect net asset purchases to end abruptly after September. In other words, the more likely alternatives after September are a gradual tapering or another extension.
Draghi says no rate hike in 2018
- Thursday, Jan 25 2018
Draghi exhibited higher confidence that the ECB would reach its inflation target, yet was extremely cautious in signalling any policy changes ahead. His reluctance to call recent FX moves excessive was still what markets paid most attention to. Further confidence towards reaching the target, policy changes still remote The ECB continued to sound optimistic about the economy. The statement said the strong cyclical momentum, the ongoing reduction of economic slack and increasing capacity utilisation strengthen further our confidence that inflation will converge towards our inflation aim of below, but close to, 2%.