ECB Vice President Luis de Guindos said today that the centra bank foresees “lingering softness” n the near term, due to geopolitical factors and trade tensions. Both are weighing on exports and manufacturing in Eurozone economy.
He emphasized that “if we see that inflation expectations start to de-anchor, we will act.” ECB has a “wide range of instruments available”, including forward guidance, TLTRO and QE is one of them. And, “a combination of actions” could be used to restore inflation.
De Guindos’ comments echoed President Mario Draghi’s yesterday. Draghi said, “in the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required.”