ECB Preview: Draghi to maintain policy stance and rhetoric – Lloyds Bank

Hann-Ju Ho, Research Analyst at Lloyds Bank, suggests that they expect the ECB to leave its policy stance and rhetoric broadly unchanged at the 9 March policy meeting.

Key Quotes

“It has already said monthly asset purchases will be lowered from €80bn to €60bn in April, running to the year-end.”

“Our baseline forecast is for the ECB to signal a gradual ‘tapering’ of its asset purchases next year in either September or October.  President Draghi is likely to play down the latest rise in headline inflation to 2%, above the ECB’s goal, and emphasise that it needs to be durable and self-sustained.”

“The ECB is expected to repeat its forward guidance that policy rates will “remain at present or lower levels for an extended period of time”.”

“New economic projections are likely to revise up inflation, especially for this year, but economic growth forecasts are expected to be broadly unchanged, with the ECB continuing to see downside risks.”