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Draghi: ECB to reach inflation goal at the end of 2018 or early 2019

Mario Draghi didn't address talk of the ECB tapering

Governments know that ECB stimulus won't last forever, ECB President Mario Draghi said Saturday in Washington.

What he didn't say was how long bond buying will last.

An 'ECB sources' story last week from Bloomberg said there was a consensus at the ECB on tapering but didn't give an indication how soon that may come. Other officials have denied the talk but Draghi was mum on the topic.

Instead he focused on growth, which he called steady but moderate. His focus, he said, was on the implementation of monetary policy.

Thanks to ECB policies, he claimed that growth would be an additional 1.3% over three years and inflation 1.4% higher. Since the Spring, he said that global economy had improved but looking ahead he sees significant geopolitical risks.

I wonder which political candidate he's talking about there.

In terms of FX, this is a bit of a non-story. I don't see it moving the euro at the open. The timeline on the inflation goal is the most-notable part but what's unclear is how much bond buying the ECB thinks it needs to get there. That's a stock vs flow argument. Perhaps they think that tapering starting in March through year end, followed by +12 months of a lag is enough.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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