ECB on hold, Draghi’s press conference comments

The European Central Bank (ECB) left its policy mix unchanged today, giving the bank more time to assess the impact of its latest burst of stimulus on the faltering eurozone economy.

In a statement Wednesday, the ECB reiterated that it doesn’t “expect to increase its key short-term interest rate, currently set at -0.4%, before next year.” It also pledged “to continue reinvesting maturing bonds” from its giant bond-buying program “for an extended period of time” after it starts to raise rates.

Press conference comments

  • ECB Stands Ready to Adjust All Instruments, If Needed
  • Details on New LTROs Will be Communicated in One of Next Meetings
  • Incoming Data Confirm Slower Growth Momentum
  • Some of the Special Factors Dampening Growth Appear to Be Fading
  • Geopolitical Risks, Protectionist Threats Weighing on Econ Sentiment
  • Ample Degree of Monetary Stimulus Still Needed
  • Significant Monetary Policy Stimulus Provided by Forward Guidance
  • Incoming Data Still Weak, Particularly in Manufacturing
  • Weaker Econ Data Reflect Slowdown in External Demand, Country-Specific Factors
  • Slower Growth Momentum Extending Into Current Year
  • Favorable Financing Conditions, Rising Wages to Support Econ Activity
  • Risks to Eurozone Growth Outlook Still Tilted to Downside
  • Headline Inflation Likely to Decline Over Coming Months
  • Measures of Underlying Inflation Remain Generally Muted
  • Labor Cost Pressures Have Strengthened, Broadened
  • New TLTROs Will Help Ensure Favorable Lending Conditions Going Forward
  • Bank Lending Survey Shows Overall Lending Conditions Still Favorable
  • Growth of Loans to Businesses Has Moderated in Recent Months
  • Underlying Inflation Expected to Rise Over Medium-Term
  • Urges Decisive Steps to Complete Banking Union, Capital Mkts Union
  • Will Need to See How Econ Will Turn Out to Decide on New TLTRO Terms
  • Inflation Expectations Have Deteriorated Mainly Because of Negative Risk Premium
  • We Have Shown That We Have “Plenty of Instruments”
  • We Remain Fully Committed to Return Inflation to Target
  • Protectionist Threats Undermining Confidence Globally
  • Currently Analyzing Effects of Negative Depo Rate on Banks’ Profitability
  • We Have Optionality to Extend Existing Instruments
  • ECB’s Forward Guidance Has Responded to Weakening Econ Conditions
  • Probability of Recession Remains Low
  • The EUR currently trading atop of its intraday low at €1.1230