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You can find the current article at its original source at https://www.theguardian.com/business/live/2019/sep/12/trump-delays-tariffs-markets-ecb-stimulus-package-qe-mario-draghi-business-live

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Version 1 Version 2
Trump hits out as ECB launches new stimulus package – business live Trump hits out as ECB launches new stimulus package – business live
(31 minutes later)
Q: Are people right to be concerned about the negative side effects of QE and record low interest rates?
Draghi replies that the ECB is aware of the side effects of our monetary policy and we are closely monitoring all these effects.
Draghi, asked what happens if the US intervenes in the dollar: "We stick with the G20 consensus. Namely, that we will never pursue competitive devaluation. So we expect that all the all the G20 members would underwrite the same consensus."
Q: What would the ECB do if America deliberately weakened the dollar?
Draghi says that all G20 members are expected to abide by a consensus not to engage in “competitive devaluations” (currency wars).
Allianz’s chief economist, Mohamed El-Erian, points out that the ECB has certainly weakened the euro - even though Draghi denies it is deliberate.
.#Euro reaction of to the @ECB measures reinforces the already-notable weakening of the European currency against the dollar (chart). While Mario #Draghi again denied the central bank is targeting a weaker currency, this view is not shared by President @realDonaldTrump and other pic.twitter.com/O480WC64CJ
Q: What do you think about Donald Trump’s tweet?
ECB president Draghi steps forward and sweeps the president’s attack aside.
We have a mandate. We pursue price stability and we don’t target exchange rates. Period.
More reaction:
Draghi goes nuclear: Fiscal policy should become the main instrument
Google Translate says: "Please please please spend some money, Mrs. Merkel."
Mario Draghi is doubling down on his call for governments to raise their spending.
If fiscal policy was more effective then our stimulus policies would work better, with less negative side effects, he says.
#Draghi “It’s high time for fiscal policy to take charge “ . This is a game changer. And correct. #ECB #Riksbank #fiscalpolicy https://t.co/oTyxFEUf2e
#Draghi says there was #unanimity that fiscal policy should become the main instrument. Little joke. That seems to be the only point of unanimity. #ECB
Draghi: "Fiscal policy should be the main instrument." pic.twitter.com/8PHkBjheXm
Onto questions....
Q: What was the mood like at today’s meeting, as several members of the governing council had opposed restarting QE? (including the German and Dutch central bank chiefs).
Draghi embarks on a long explanation. He says the eurozone had slowed more than expected since June (when he gave a speech hinting at fresh stimulus). He also points to the lower inflation forecasts.
These, and the “persistence of downside risks”, were factors behind today’s decision, he says.
Draghi also points out that the ECB’s base forecasts don’t include a hard Brexit, even though it has become more likely recently, or a deeper trade war.
He’s now picking out phrases from the ECB’s statement - including the commitment not to raise interest rates until inflation is ‘robustly’ back on target.
But he can’t put off the answer for ever....
Draghi says: There was unanimity....that fiscal policy should become the main tool (triggering chortles in the press room).
That feels significant -- the ECB is saying that politicians can’t rely on central bankers any more.
What we want to know, though, is whether the hawkish members of the governing council were unanimously behind Draghi.
And on that, the president say:
The consensus was so broad that we didn’t take a vote.
#hmmm
LOL, mon policymakers are unanimous that fiscal policy must now take over ... is the ECB really sure that this is the signal they want to send? Anyway, sign of the times ...
Draghi ends his statement by calling on governments to raise spending, where possible, to give the eurozone a fiscal boost.Draghi ends his statement by calling on governments to raise spending, where possible, to give the eurozone a fiscal boost.
Shares are rising across Europe, as equities benefit from the ECB’s latest stimulus plans.Shares are rising across Europe, as equities benefit from the ECB’s latest stimulus plans.
The French and German markets are both up 0.5%, pushing the EU-wide Stoxx 600 index to its highest level since late July.The French and German markets are both up 0.5%, pushing the EU-wide Stoxx 600 index to its highest level since late July.
The euro is continuing to fall as Draghi speaks, which will NOT please president Trump.The euro is continuing to fall as Draghi speaks, which will NOT please president Trump.
It’s now lost three-quarters of a cent, dropping to $1.0927. That’s very close to the two-year low hit last week.It’s now lost three-quarters of a cent, dropping to $1.0927. That’s very close to the two-year low hit last week.
The ECB has also cut its inflation forecasts.The ECB has also cut its inflation forecasts.
Draghi blames the lower oil price, and “global trade issues” [a jibe to Donald Trump?!]Draghi blames the lower oil price, and “global trade issues” [a jibe to Donald Trump?!]
ECB Staff projections- Inflation forecast2019: 1.2% (1.3%)2020: 1% (1.4%)2021: 1.5% (1.6%)ECB Staff projections- Inflation forecast2019: 1.2% (1.3%)2020: 1% (1.4%)2021: 1.5% (1.6%)
The ECB has cut its growth forecasts for 2019 and 2020.The ECB has cut its growth forecasts for 2019 and 2020.
It now expects GDP to rise by 1.1% this year, down from 1.2%. In 2020, growth is seen picking up to 1.2%, not the 1.4% previously expected.It now expects GDP to rise by 1.1% this year, down from 1.2%. In 2020, growth is seen picking up to 1.2%, not the 1.4% previously expected.
ECB Staff projections- Growth forecast2019: 1.1% (1.2%)2020: 1.2% (1.4%)2021: 1.4% (1.4%)ECB Staff projections- Growth forecast2019: 1.1% (1.2%)2020: 1.2% (1.4%)2021: 1.4% (1.4%)
President Draghi singles out the US-China trade war as a key cause of Europe’s problems.President Draghi singles out the US-China trade war as a key cause of Europe’s problems.
He says that global trade tensions are hurting the eurozone -- particularly its factories (as we saw this morning, when output slumped by 0.4% in July).He says that global trade tensions are hurting the eurozone -- particularly its factories (as we saw this morning, when output slumped by 0.4% in July).
Draghi confirms that the ECB has cut its deposit rate (for commercial bank deposits) to minus 0.5%, and will keep interest rates at record lows indefinitely, until inflation has robustly picked up.Draghi confirms that the ECB has cut its deposit rate (for commercial bank deposits) to minus 0.5%, and will keep interest rates at record lows indefinitely, until inflation has robustly picked up.
He also outlines the changes to the TLTRO loans programme, to make them more attractive to banks (as summarised here).He also outlines the changes to the TLTRO loans programme, to make them more attractive to banks (as summarised here).
He then insists that today’s “comprehensive package of monetary policy decisions” will provide the firepower needed to ensure that financial conditions remain “very favourable”.He then insists that today’s “comprehensive package of monetary policy decisions” will provide the firepower needed to ensure that financial conditions remain “very favourable”.
He points to the “continued shortfall of inflation”, and adds that incoming information suggest the eurozone economy is suffering “a more protracted weakness” than previously thought.He points to the “continued shortfall of inflation”, and adds that incoming information suggest the eurozone economy is suffering “a more protracted weakness” than previously thought.
ECB president Mario Draghi is about to explain why he and his colleagues have decided to launch a new stimulus programme. You can watch it live here.ECB president Mario Draghi is about to explain why he and his colleagues have decided to launch a new stimulus programme. You can watch it live here.
I’ve embedded it at the top of this blog too (you might need to refresh to see it).I’ve embedded it at the top of this blog too (you might need to refresh to see it).
Watch ECB press conference live: President Mario Draghi explains today’s monetary policy decisions https://t.co/AN04eElLTjWatch ECB press conference live: President Mario Draghi explains today’s monetary policy decisions https://t.co/AN04eElLTj
Trump’s latest blast comes a day after he accused the US Federal Reserve of being “boneheads” for keeping interest rates too high.....Trump’s latest blast comes a day after he accused the US Federal Reserve of being “boneheads” for keeping interest rates too high.....
Here’s a handy reminder of the European Central Bank’s new stimulus programme, from ING.Here’s a handy reminder of the European Central Bank’s new stimulus programme, from ING.
Deposit rate cut by 10 basis point to -0.5%.Deposit rate cut by 10 basis point to -0.5%.
A tiering system will be introduced.A tiering system will be introduced.
Forward guidance on rates is no longer calendar based but open-ended and state-dependent.Forward guidance on rates is no longer calendar based but open-ended and state-dependent.
QE will be restarted with €20bn per month, starting 1 November. There is no end date added to QE.QE will be restarted with €20bn per month, starting 1 November. There is no end date added to QE.
The TLTROs will be repriced and include an incentive for banks to increase lending. Along the lines of the first two generations of TLTROs, banks which exceed the benchmark ECB loans will be charged at the deposit rate.The TLTROs will be repriced and include an incentive for banks to increase lending. Along the lines of the first two generations of TLTROs, banks which exceed the benchmark ECB loans will be charged at the deposit rate.
Newsflash: US president Donald Trump has reacted, accusing the European Central Bank of fighting a currency war.Newsflash: US president Donald Trump has reacted, accusing the European Central Bank of fighting a currency war.
In a sharply worded tweet, Trump says the ECB is is depreciating the euro - at the expense of US exporters.In a sharply worded tweet, Trump says the ECB is is depreciating the euro - at the expense of US exporters.
Once again, he’s criticising the US Federal Reserve for not cutting its interest rates [US headline borrowing costs are currently 2.25%, compared to 0% in the eurozone].Once again, he’s criticising the US Federal Reserve for not cutting its interest rates [US headline borrowing costs are currently 2.25%, compared to 0% in the eurozone].
European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.... And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.... And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!
Trump is correct on his last point. French and German 10-year bonds are both trading at negative yields, while US Treasury bills trade at around 1.7% per year.Trump is correct on his last point. French and German 10-year bonds are both trading at negative yields, while US Treasury bills trade at around 1.7% per year.
But that also reflects the fact America’s economy is growing rather faster than the eurozone.But that also reflects the fact America’s economy is growing rather faster than the eurozone.