Economics
Draghi Says Euro-Area Turnaround Warrants Policy Dial-Back
- ECB drops option to boost size of monthly purchases if needed
- President warns of key risks of protectionism and deregulation
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The European Central Bank unexpectedly dropped a pledge to ramp up bond buying if the economy deteriorates, saying the turnaround in the outlook has given it confidence to change a key part of its monetary-policy guidance.
In what the ECB President Mario Draghi said was a unanimous decision, policy makers in Frankfurt surprised investors by ending an easing bias on quantitative easing, effectively a conditional promise to increase debt purchases in “size and/or duration” if needed. But he said downside risks remain, and added rising trade protectionism to the list of threats.