The European Central Bank took a step
back from its fiscal stimulus policy, expressing confidence on the
robustness of the euro zone’s economic recovery; at the same time, Mario Draghi warned US President Donald Trump that his trade war policies could trigger a crisis of confidence in the US.
On Thursday, the ECB dropped a pledge to
increase its bond buying if needed. Frankfurt will continue buying bonds
at a rate of €30bn a month, completing its €2.55 trillion bond-buying
programme. The programme is expected to continue until September 2018
and, if needed, it will be extended. However, the ECB dropped a
reference to extending the sum, as noted both by Reuters and the German
public broadcaster DW.
Mario Draghi said on Thursday that it is
possible that the euro zone will grow faster than currently projected.
The ECB has already raised its 2018 growth projections for the euro zone
to 2,4%, but inflation is not expected to reach the 2% target.
Inflation will remain subdued to 1,5% in 2018, according to ECB
projections.
However, Mario Draghi did warn of the
dangers of “protectionism,” that is, hours before US President Trump was
expected to make specific statements regarding his steel and aluminum
tariffs. “If you put tariffs against (those) who are your allies, one
wonders who the enemies are,” Draghi said.
Read more: Draghi signals unwinding of fiscal stimulus but warns Trump of a confidence crisis
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