The mixed reaction in the markets well illustrates the difficulty in interpreting the announcement Thursday from the European Central Bank (ECB). Mario Draghi announced a strengthening of the asset purchase, but not exactly as everyone expected. Instead of a 'simple' extension of the programme for a further six months, until September 2017, extended it until December, but with a decrease in the volume of monthly purchases. Instead of the current €80 billion, the pace will go down to €60 billion from April next year. In fact, it is a higher dose than the version that was expected, but not left, yet, be seen by some as a withdrawal of the foot from the accelerator.
This new version of monetary stimulus, at a time when inflation remains quite far from the target of 2% and there are expectations that remain so during the next few years, is already the third since the QE (Quantitative Easing, in the acronym in English) was launched in march 2015. The first was right at the end of last year, when the program was extended from the original deadline of September 2016 to march 2017. The second happened already this year, in February, when the volume of monthly purchases rose from €60 billion to €80 billion. In the original version, the QE pointed to a total of €1.1 billion. Rose to, respectively, €1,4 billion and €1.7 billion. Now, it will have a total in the order of €2,2 billion, a €540 million.
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