Draghi Says ECB Rate to Stay Low for ‘Extended Period’
That is an opened declaration that ECB is joining the currency war now. Now we can sit back and watch the show, since if we try to trade, we will be destroyed
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President Mario Draghi said the European Central Bank expects to keep interest rates low for an “extended period” as he tries to restrain market borrowing costs, in a new departure for an institution averse to setting policy in advance.
With ECB officials today leaving their main refinancing rate at 0.5 percent, Draghi fleshed out their outlook for monetary policy after investors pushed up long-term bond yields, threatening the region’s economic recovery. The statement came on the same day that the Bank of England also tried to manage investor expectations in Mark Carney’s first week as governor.
“The Governing Council expects the key ECB interest rates to remain at present or lower levels for an extended period of time,” Draghi said at a press conference in Frankfurt. “What the Governing Council did today was to inject a downward bias in interest rates for the foreseeable future. Our exit is very distant.”
Stocks and bonds rose, while the euro fell after the comments. The remarks followed a surge in Portugal’s 10-year bond yield above 8 percent for the first time since November and a signal from the Federal Reserve that it may soon pull back monetary stimulus.
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