Mario Draghi said investors predict the European Central Bank will start increasing interest rates by 2017 as he pledged to expand stimulus measures if needed.
“When we look at market expectations, the first hike in interest rates is foreseen by 2017,” the ECB president said in a speech at the Brookings Institution in Washington today. “The Governing Council has repeated many times, even as it was adopting new measures: it is unanimous in its commitment to take additional unconventional measures to address the risks of a too-prolonged period of low inflation.”
The ECB has introduced measures from negative interest rates and long-term loans to asset purchases to fend off deflation and rekindle growth in the 18-nation region. Draghi, in Washington for the annual meetings of the International Monetary Fund and World Bank, has also stressed that monetary policy will fail if European governments drag their feet on structural reforms and reiterated that message today.
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