European Central Bank President Draghi said there is still a lot of room for the bank’s asset purchase plan.
The European Central Bank revised its interest rate expectations earlier, saying it will not raise interest rates before mid-2020, indicating that the bank is skeptical about the economic recovery.
The European Central Bank’s recent forecast is that economic growth and inflation forecasts will be lower in 2020.
Further interest rate cuts and other measures
Draghi said that if inflation does not meet the target, it can cut interest rates again or purchase assets further.
“If the crisis comes, we will be flexible in the scope of the mandate. We will fight again to meet all the challenges.” He pointed out: “Further cuts in interest rates and other measures to reduce side effects are part of our tools. There is still a lot of room to buy an asset plan.”
Economists refer to the ECB or need assistance from other parties
Many participants worried that the ECB has enough tools to deal with the recession. Olivier Blanchard, former chief economist of the International Monetary Fund (IMF), told CNBC: “I am almost certain that the ECB itself cannot fight the economic recession. It needs help. This is quite obvious.”
He explained that the problem is not whether there are enough tools, but the actual impact of these tools on the economy.