The European Central Bank’s aggressive quantitative-easing program hasn’t even been around to mark its first birthday, and already pressure is mounting on the policy makers to announce more stimulus.
With the closely watched ECB meeting coming up this week, investors are now speculating about when the central bank will make a further stimulus move, rather than if such a move could happen. That notion was hammered home last week, when data confirmed the eurozone has slipped back into negative inflation, which is bad news for both the ECB and the region’s growth prospects.
The central bank’s primary mandate is to ensure price stability throughout the currency bloc and that means targeting inflation rate of close to, but below 2%. We haven’t been there since January 2013. Inflation presently stands at negative 0.1%.
