ECB Oct'19 Meeting review - Draghi brings no surprise in swan song

Draghi as expected in his last press conference did not brought any changes in the monetary policy keeping the rates and QE unchanged from last month. During the press conference, Draghi reflected on his tenure than the specific economic analysis and guidance on policy. Some interesting smaller details regarding the next months of monetary policy emerged during the Q&A session when he mentioned that there were problems with the self-imposed limits to asset purchases. Differences with private sector estimates were, according to him, the result of different hypotheses. He also warned that trade issues are still weighing on the Eurozone economy and the risks to growth "remain on the downside"

Draghi said Lagarde attended Thursday’s meeting but did not take part in the discussions or deliberations. He downplayed the other members dissatisfaction in ECB board even though Sabine Lautenschlaeger, a hawkish member of the ECB executive board member and thus the governing council, resigned last month following the announcement of the rate cut and stimulus measures. Germany has nominated Isabel Schnabel to fill the vacated position who is a monetary centrist, professor at the University of Bonn and an economic advisor to Berlin.

Draghi suggested improved fiscal policies could accelerate the shift to higher interest rates, and he called on politicians in the single-currency area to tailor their budgets to support the economy in view of the weakening economic outlook and the continued prominence of downside risks, governments with fiscal space should act in an effective and timely manner. His final comment was perhaps prophetic - When you speak too naturally and change your audience you risk stepping into the realm of politics


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