Thu Dec 4th, 2014 at 09:18:44 AM EST
From the Guardian live stream I found this:
[The ECB] has cut its inflation forecasts in 2014 to just 0.5%, from 0.6%.
The figure for 2015 has been slashed to just 0.7%, from 1.1%. In 2016, it rises to 1.3%, down from 1.4% in the previous staff forecasts.
Think about this: By its own forcast, the ECB will now miss its target for at least four years in row. And this while Eurozone unemployment is at 12%.
Draghi says the ECB's growth and inflation forecasts have been revised down substantially; and he admits that these forecasts do not include the latest slump in oil prices.
So probably inflation will be even lower, then the already terrible forecast predicts.
This is obviously fully in line with the overall behavior of the ECB. At the beginning of the year, when inflation was at 0.8% what did the ECB do: nothing! It took another 8 month or so, until the ECB started a program to extend its balance sheet.
And why: Because inflation expectations are well anchored. Already this was quite strange: The ECB has a Mandate to keep inflation at 2%, not 'inflation' expectations. Now, you could argue that inflation exceptions at 2% guarantee that in 'the medium term' inflation will run at 2%.
But how are you going to keep inflation exceptions anchored if, by your own forecast, you are going to miss the inflation target for 4 years in a row (this was already the case in the beginning of the year). And on top of this the ECB is in now way committed to overshooting. Such a asymmetric target guarantees inflation below the mandated 2%.
How is that not an issue yet! Are all Europeans so scared of inflation that nobody notices that the ECB is not doing its job?