The European Central Bank’s chief economist just dropped a loud hint that it could take fresh action to stimulate Europe’s economy.
Falling commodity prices, and signs of economic weakness, mean there is a greater risk that Europe misses its inflation targets, Peter Praet told journalists in Mannheim, Germany. If so, the ECB would act, he insisted.
Here’s Praet’s comments, via Reuters:
“Developments in the world economy and commodity markets have increased the downside risk in achieving the sustainable inflation path towards 2 percent; the risk has increased.
“The governing council will closely monitor all incoming information,” he said. “There should be no ambiguity on the willingness and ability of the governing council to act if needed.”
Which is interesting because the ECB already has a €1 trillion conventional QE programme under way.
So what's next? People's Quantitative Easing? Hard to see what else it could be given that interest rates are already on the floor.