After more than four years of negative interest rates and cheap loans, and 2.6 trillion euros in asset purchases, the European Central Bank is still struggling to revive euro-area inflation. Global trade tensions are weighing on confidence and hitting manufacturers already facing structural challenges.
President Mario Draghi says the central bank stands ready to do more if the outlook fails to improve. Investors and economists expect at least a cut in interest rates, and possibly more quantitative easing.
Click through the timeline to see how key indicators have weighed on the central bank.
Q1 2021
Policy makers seen reinvesting proceeds from maturing debt until past the end of 2021
Q3 2019
Economists predict deposit rate to be lowered to -0.5%. Third round of targeted long-term loans launches
Q2 2019
Governing Council signals willingness to use further instruments (cutting interest rates or restarting bond-buying) if warranted
Q1 2019
ECB announces new round of targeted long-term loans to start in September 2019
Q4 2018
ECB phases out net asset purchases after buying at reduced pace in final three months of 2018
Q2 2018
In June, the ECB says monthly QE purchases of 30 billion euros to continue until September, and then to be phased out with 15 billion euros in each of October, November and December. Interest rates will be kept at record lows “at least through the summer of 2019.”
Q1 2018
ECB reduces the monthly pace of its asset purchases by half, to 30 billion euros, starting in January and stresses the importance of its reinvestments. In March, it unexpectedly drops its so-called easing bias, a pledge to increase the monthly pace of bond purchases if the inflation outlook worsens.
Oct. 2017
ECB decides to reduce monthly pace of asset purchases by half to 30 billion euros from January and to extend the program until at least September 2018. Policy makers also pledge to continue reinvesting proceeds from maturing debt for an extended period of time after the end of net asset purchases.
Sep. 2017
Draghi says “bulk of the decision” about future policy path will come in October as ECB updates economic forecast
June 2017
ECB adapts policy language to pave way for gradual unwinding of stimulus
April 2017
Reduction of monthly QE purchases sparks exit debate
March 2016
ECB announces “comprehensive package” of rate cuts, increased monthly bond purchases, addition of corporate bonds to QE, new targeted long-term loans, and reiterates forward guidance on borrowing costs
March 2015
Jan. 2015
ECB announces large-scale government-bond purchases after inflation rate fell below zero for first time since the financial crisis
Sep. 2014
ECB announces ABS and covered-bond purchases plan, and Draghi pledges to stir balance sheet toward 2012 dimensions, making a bigger sovereign-bond buying program inevitable
June 2014
ECB becomes first major central bank to cut interest rates below zero, and banks are offered targeted long-term loans to boost credit
April 2014
July 2013
Draghi introduces forward guidance on interest rates
Sep. 2012
ECB presents OMT government-bond purchase plan, terminates SMP program. The balance sheet shrinks
July 2012
Draghi vows to do “whatever it takes” to safeguard the euro after bond spreads surge