FRANKFURT, Germany (AP) — The Latest on the European Central Bank’s monetary policy meeting (all times local):
European Central Bank head Mario Draghi says the bank’s revised inflation forecast “goes in the right direction.” But he didn’t say whether the 1.7 percent estimate for 2020 would mean the bank had achieved its goal of just under 2 percent.
He said the bank’s governing council had “increasing confidence” that inflation was turning up. The bank has struggled to raise inflation toward its goal, using low interest rates and bond purchases.
The European Central Bank has raised its forecast for growth and inflation as the eurozone enjoys an economic upswing.
The bank raised its forecast for growth next year to 2.3 percent from 1.3 percent in the last set of forecasts issued in September.
The inflation outlook was raised to 1.4 percent for next year from 1.2 percent. But the first forecast for 2020 came in at 1.7 percent, lower than some analysts had expected.
The bank’s goal for inflation is close to but below 2 percent. The bank has struggled to achieve that despite setting interest rates at record lows and pushing newly printed money into the financial system though bond purchases.
The European Central Bank has left its interest rates and stimulus measures unchanged as it looks ahead to the delicate matter of ending its bond-purchase program next year.
Investors are now waiting for President Mario Draghi’s news conference Thursday for clues about when and how the bond stimulus might end. The bank decided in October to reduce the purchases to 30 billion euros ($35 billion) a month from 60 billion euros and to extend them at least until September, or longer if necessary.
The ECB has tried to reassure markets that its stimulus will be withdrawn slowly to not disrupt the economy.
The bank’s governing council left its key benchmark for lending to banks at zero. The rate on deposits it takes from commercial banks remained at minus 0.4 percent.
This post originally appeared on Townhall