Skip to content
Subscriber Only

ECB's Praet Warns Against Early Shift in Guidance on Stimulus

  • Chief economist says labor supply may signal economic slack
  • Says in Reuters interview markets see bond buying ending soon
Bloomberg business news

Less Likely That Draghi Will Ever Hike Rates, Schumacher Says

European Central Bank policy maker Peter Praet opposed shifting the institution’s language on its stimulus plans any time soon, saying rising labor supply suggests the euro area’s economic slack may be greater than previously thought.

Praet, the ECB’s chief economist, said in an interview with Reuters that officials have been surprised by the number of people joining the workforce, which may mute the upward pressure on wages and therefore inflation. At the same time, he acknowledged that investors expect the bond-buying program to end soon. Purchases are currently intended to run until September but could be extended if the inflation outlook remains weak.