The ECB has done nothing to change the outlook for monetary policy. It’s decision to hold rates steady has been met with a shrug of shoulders by the euro. The only thing of note in the history books from the October 2019 meeting will be a meeting remembered for one thing: the end of Mario Draghi’s tenure as ECB President.
The statement of monetary policy could not have been more bland today:
- Rates steady (the deposit rate remains at -0.50%).
- The ECB expects “interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon”.
- Asset purchases of €20bn per month to “run for as long as necessary”.
- Reinvesting principal payments of maturing securities for an extended period of time past any rate hikes.
Draghi’s final press conference
There was little to really impact on markets in the press conference, however, Draghi really did use his last opportunity to push for more fiscal support from governments in order to improve euro-area productivity. “implementation needs to be stepped up substantially. We see this as euro positive and a mantle that Christine Lagarde will take into her tenure..
There has been almost nothing on euro until Draghi mentioned fiascal support. However, there is nothing to really sustain a move higher .
This has been a very forgettable policy meeting for the ECB (aside from the celebration of Mario Draghi that is).