ECB: Waiting for December

Unsurprisingly, the ECB maintained the monetary status quo at its October meeting. Mario Draghi restated the commitment to preserving the substantial amount of monetary accommodation needed to secure a sustainable return of inflation towards target.
Mario Draghi specified the kind of inflation dynamics he was looking for: basically, a self-sustained inflation, which is to say an inflation driven by robust demand and wage growth. The emphasis is put on core inflation.
M. Draghi dismissed the idea that has been circulating in recent weeks of an imminent tapering. However, no clue was given concerning the possibility of extending QE in December.
Although the low inflation outlook argues for the extension of QE, there still seems to be major disagreements within the Governing Council concerning changes in the parameters of QE in order for it to continue.

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BNP Paribas Economic Research Department is a worldwide function, part of Corporate and Investment Banking, at the service of both the Bank and its customers.

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