Mario Draghi, a dove for all seasons
Leaving the blunt instrument of rate hikes as a decision for his successor to deal with sometime in 2019, Mario Draghi has signalled a QE power-down, commencing January 2018.
January will see a halving of bond buying, with 'only' 30 billion euros worth of bonds to be purchased monthly. We are told this will continue until September.
Refusing to call it a 'taper', the ECB chief also refused to detail a comprehensive taper/run-off/rate hike plan. Instead, by indicating September may not necessarily be a sudden end he has kept his options open.
Additionally, he confirmed any prospect for rate hikes would not be until after bond buying stops.
While this ends speculation surrounding EU rate hikes for some time (and adds more feathers and wax to equity/bond markets) it essentially confirms open-ended accommodation.
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