ECB Contemplates New Horizon

As Mario Draghi secludes himself with Europe’s top minds in central banking this week he won’t be able to escape one question: What’s next?

After all but promising that he’ll ease monetary policy in June, the European Central Bank president must now manage market expectations as banks from Goldman Sachs Group Inc. to Societe Generale SA speculate whether he’ll go further and deploy large-scale asset purchases in coming months. Draghi late yesterday opened the first ECB Forum, a gathering of policy makers and academics to be held annually in the hills northwest of Lisbon.

What Draghi says in two appearances today and tomorrow may offer clues on how he plans to overcome the stubbornly-low inflation that’s threatening the euro area’s return to economic health. Officials have said they’re working on a package of possible measures for the June policy meeting, including interest-rate cuts and liquidity injections and are holding out the prospect of quantitative easing as a more-powerful option. Draghi is due to speak at 9:00 a.m. local time.


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