ECB announced an expanded asset-purchase program
ECB announced an expanded asset-purchase program, including private and public securities, of up to 60 billion euros ($69 billion) a month to spur growth and counter deflationary pressures. ECB decision reflects adverse developments since potential for second round effects have increased.
Market based inflation expectation measures worsened, and economic slack is still sizeable, therefore action is needed to achieve inflation target. Action will underpin inflation expectations, measures will ease policy stance further, and help push inflation higher, though inflation is seen very low and negative in coming months and is unavoidable. We can expect inflation rise in in 2015 & 2016.
Oil prices have strengthened economic potential, but Draghi calls for decisive productivity and labour market reforms.Fiscal policies should support economic recovery. After Mario Draghi's speech euro sharply fell and is currently being traded few points above 1.1520 level.
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