The ECB will act if inflation expectations are anchored: de Guindos

FRANKFURT (Reuters) – Long-term inflation expectations in the eurozone must remain unchanged for the European Central Bank to provide more stimulus, said ECB Vice President Luis de Guindos. quoted Saturday.

As growth slowed and inflation remained well below the ECB's target, the bank recently raised the possibility of further stimulus, saying that a reduction in rates or even more purchases of badets may be required.

"What we need to see, is a relaxation of inflation expectations," Guindos told the Italian newspaper Corriere della Sera, at the bank's request, on measures to be taken to stimulate more economic recovery. "This has not happened yet, despite the fact that market-based inflation expectations have fallen."

Interest rates are already at an all – time low and a bond purchase program of 2.6 trillion euros (2.9 trillion euros) has just ended. 39; last year, badysts argue that the ECB has very little real firepower, its remaining tools lacking significant power.

"If there is further deterioration, then we will react," added de Guindos. "But for now, our monetary policy is fully consistent with inflation and real activity."

But de Guindos added that monetary policy was largely powerless in the face of global trade disputes, one of the main obstacles to growth and therefore to inflation.

"You can certainly mitigate the impact with monetary policy, but you will not be able to solve such problems with monetary policy," he said.