ECB's Mario Draghi speaks in New York
Here he is
- Euro area inflation is lower than ECB objective
- ECB stimulus is having intended effect
- ECB tools will work with the correct calibration
- We will secure the return to inflation target without undue delay
- We can, in any case, deploy our tools further if that proves necessary
- Would dispute the notion that they are powerless to reach objectives
- There is no doubt that if we had to intensify the use of our tools, we would
- There cannot be any limit to how far we are willing to deploy our instruments within our mandate, and to achieve our mandates
- But falls in oil and commods can have a more lasting effect on inflation, and hence become relevant for mon pol if they feed into core inflation
- That would call for more forceful mon pol response
- We have seen a higher risk that a continued period of low inflation, even supply side could start to have second round effects
- Persistently low core inflation is therefore a risk to our mandate
- Inflation has risen from its trough
- The trend in services inflation continues to be weak
- We do see some improvements as the economic recovery takes hold
- The recovery is ongoing and remains resilient to volatility in the global economy
- Without further mon pol action we would have had to push back our CPI target date
- QE extension to 2017 and re-investment will add €680bn to the system
This is the text from the speech he's giving
Pretty strong comments and the euro took a while to react but is now off around 50 pips from when he started
He's raised the level of importance on the core number now but that's something we've all been watching already on these pages. Again he's in the difficult position of trying to keep an accommodative tone while acknowledging that there are signs of improvement
This will be an important test of the euro. If it carries on down then the market is buying his message (by selling the euro). If we bounce then the magician has lost some of his powers
