ECB to take the
qe plunge this year…finally
By Jamie McGeever
February 26, 2014
Better late than never, right?
Despite the myriad political, legal and financial obstacles, the European Central Bank will this year take the plunge and start printing money, several years after its counterparts in the United States, Britain and Japan.
That’s the view of economists
AT bnp paribas, one of the first major financial institutions to predict the ECB will use the printing press, the central bank weapon of last resort, to slay the dragon of deflation and steer the fragile economy away from recession once and for all:
Asset purchases are increasingly necessary in order for the ECB to meet its primary objective of maintaining price stability.
Inflation in the euro area has persistently surprised to the downside, eroding the safety margin against deflation. „ Additional conventional policy easing will not deliver sufficient monetary accommodation for the price stability mandate to be met. Thus, the ECB will reluctantly have to follow other central banks into balance sheet expansion via asset purchases.
Annual
Inflation in the euro zone is currently running
AT 0.7 percent. That’s well below the ECB’s target of “below, but close to, 2% over the medium term” and according to
bnp paribas “is likely to remain that way for a long time.” Many economists think it will fall even further –
GOLDMAN SACHS is penciling in just 0.4% for March.
Mais la soucoupe volante c'est toi qui l'a rajoutée non ?
