Mario Draghi backs investor expectations for late 2019 rate hike
Despite the US-China trade ructions, the ECB president expects solid and widespread economic growth and reaffirms QE will end this year
Frankfurt — European Central Bank president Mario Draghi on Thursday backed investor expectations for a rate hike in October 2019, saying the risks from an unpredictable global trade conflict did not warrant any deviation from its plan now. Draghi struck a relatively upbeat tone on the economic outlook and reaffirmed plans to end the central bank’s €2.6-trillion stimulus programme this year and keep rates at their record low level "through the summer of 2019". Asked to unpack this formulation, which has given rise to diverging interpretations by investors and even policy makers, Draghi said market expectations were "very well aligned" with the central bank’s own. Money markets currently price in a 10 basis points increase in the ECB’s deposit rate in October 2019, in what would be the first hike since 2011 after years of monetary largesse. "As far as pure (market) expectations are concerned, they are very well aligned with the anticipation of the Governing Council," Draghi said. Sou...
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