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ECB’s Weidmann Rejects Sovereign QE With No Deflation Seen

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Jens Weidmann said there’s no need for the European Central Bank to expand monetary stimulus, and argued that sovereign-debt purchases are problematic even if slumping oil prices cause deflation.

“Such a development initially requires no monetary policy response, as long as no second round effects are to be seen,” the Bundesbank president said at an event late Monday in Frankfurt. “There’s a whole row of economic reasons that speak against government-bond purchases, even before you consider the legal question of whether they’re compatible with the ban on monetary financing.”