ECB risks remain tilted toward further easing - Wells Fargo

Analysts from Wells Fargo expect the European Central Bank (ECB) to leave monetary policy unchanged in the near term and recognize that risks remain tilted toward further easing.

Key Quotes:

“The European Central Bank made no change to its monetary policy stance at its prior meeting, following the broad easing measures adopted at its March meeting. Included among these measures were cuts to its three main policy rates, the inclusion of corporate bonds in the asset purchase program and an acceleration of the pace of total asset purchases.”

“However, ECB policymakers have subsequently suggested further easing may not be imminent, while also calling on other policy areas—namely, fiscal policy and structural measures—to contribute more decisively to growth.

“With growth still anemic and inflationary pressures broadly absent from the Eurozone economy, we recognize that risks remain tilted toward further easing from the ECB. That said, policymakers may keep policy steady in the near term as they implement previously announced measures and wait to see if other policy areas will step in to become more supportive of growth.”