Last month, the ECB decided to extend the QE, but to a doubly smaller amount - €30bn. by the end of September, but this figure could increase if inflation in the eurozone does not rise to the required levels. Although this decision has been backed by a "large majority," some ECB officials are worried that the bank will not send wrong signals to investors that QE may be extended in 2018.
Some Central Bank members are of the opinion that a stable eurozone restoration will lead to a shorter QE period, while others believe that a longer period of the quantitative easing program will provide longer monetary support. It is the second group that fears that if the ECB sets a QE final date, deeper price adjustments and unnecessary tightening of financial conditions may follow. Maintaining an open end for the Asset Builder program highlights the firm commitment of the Governing Council to maintain monetary incentives to bring inflation to the desired by the ECB of just under 2%.
Although the program for quantitative easing remains open, investors are currently trading on a full-off basis, with EUR rising for the third consecutive day.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
Bloomberg: ECB Policy Makers Worried Markets Expect More QE Extensions
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