ECB Minutes Show Deflation Fears Prompted it to Launch QE

The European Central Bank’s (ECB) Governing Council “broadly shared” the view that further stimulus was needed when it decided to launch its controversial quantitative easing program.

The first-ever minutes of an ECB policy meeting were published Thursday. They also revealed that at its January meeting – when it announced its hotly anticipated QE program to help kickstart the moribund euro zone economy – policymakers were also concerned about low inflation.

“Taking into account both the weakened medium-term outlook for price stability and the smaller than envisaged monetary stimulus introduced by the policy measures adopted in June and September 2014, the prevailing degree of monetary policy accommodation was seen to fall short of sufficiently countering the heightened risks to the ECB’s medium-term price stability objective,” the minutes said.

“Against this background, there was a broadly shared view that the conditions were fully in place for taking additional monetary policy action at the current meeting.”

The “accounts,” as the ECB calls them, shed light on one of the most crucial ECB meetings in years, in which President Mario Draghi announced the launch of a 60 billion euro ($70 billion) private and public bond-buying program.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza