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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: dalroi who wrote (106132)	5/19/2014 10:24:29 AM
From: Haim R. Branisteanu	Respond to of 219968

ECB Mersch: Probability of June ECB Action Has Risen Considerably 19-May-2014 By Todd Buell European Central Bank Executive Board member Yves Mersch Monday sent a clear signal that the ECB will further loosen monetary policy at its meeting in early June against a backdrop of very low inflation that is well below the bank's target. "The probability that the Governing Council will act already at its next monetary policy meeting in June has risen considerably," said Mr. Mersch. In remarks prepared for delivery in Munich, the central banker said that the ECB has the "tools at hand to further loosen policy." He also said that the 24-member Governing Council, that sets monetary policy for the euro zone, is unanimous in its openness to use both conventional and unconventional policy tools if needed to combat risks of inflation staying too low for too long. The remarks add further weight to expectations that the ECB will act next month. ECB head Mario Draghi already laid the groundwork for additional measures at the central bank's last news conference, held earlier this month. There, he said "the governing council is comfortable with acting next time." Also last week, the ECB's top economist, Peter Praet, in an interview with German newspaper Die Zeit, said the central bank is preparing a number of measures to counter low inflation. He mentioned a negative rate on deposits as a possible option in combination with other measures. The ECB tries to keep inflation at just below 2% over the medium term in the 18 nation currency bloc. Inflation readings have been far below that in recent months. Inflation in April grew at only 0.7% versus one year earlier. In his prepared speech, Mr. Mersch said that there were no signs of deflation hitting the euro zone, but he said that even a long period of very low inflation would be troubling, since it could dis-anchor long-term inflation expectations. At the same time, such conditions would make life more difficult for countries in crisis as it would make it harder for them to increase competitiveness. Write to Todd Buell at todd.buell@wsj.com