Mario Draghi, the president of the European Central Bank promises more stimulus if the the eurozone economy fails to pick up
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European markets are making notable gains – reversing earlier falls – after Mario Draghi hinted that more interest rate cuts and bond purchases could be on the horizon.
Neil Wilson, analyst at markets.com, says the central bank governor is now in “full dove mode”.
The towel has been thrown in. Building on the last ECB meeting, at which some members discussed reopening quantitative easing, this looks like a clear signal that the central bank is preparing markets to expect monetary policy to become more accommodative this year.
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Mario Draghi has raised expectations that the European Central Bank will pump more stimulus into the eurozone economy.
Speaking in Sintra at the ECB’s forum on central banking, Draghi said the door was still open to rate cuts and/or further bond purchases:
Further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools. And the APP (asset purchase program) still has considerable headroom.
If the crisis has shown anything, it is that we will use all the flexibility within our mandate to fulfil our mandate — and we will do so again to answer any challenges to price stability in the future.