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What they say: "Lower rates and QE will probably not have much effect on the euro zone economy, as Draghi knows," Axios analyst Joseph Trevisani, senior analyst at FXStreet, told Axios. "By placing the burden of inaction on governments, it diverts (as much as possible) from the likely failure of the ECB's stimulus."
The big picture: Draghi's mantra, "No matter what it takes", was credited for saving the euro zone, Europe and the euro, while the central bank took unprecedented steps to give life back to the economy during his 8 years at the head of the group.
- However, it has generally failed to generate inflation and allow the economies of the euro area to take charge.
- Mr Draghi actually admitted Thursday, calling on politicians to take the reins and administer fiscal stimulus to help support their respective economies.
- But it has always advanced with exceptional measures, apparently in the face of unprecedented dissent from the influential governors of the central banks of Germany, France, the Netherlands, Austria and Estonia, among others.
Be smart: "Central banks are reluctant to admit the limits of monetary policy, but that's about what we think the ECB is," said Deutsche Bank chief economist Mark Wall, and the leading economist, Peter Sidorov, in a note to customers.
Where he is: Draghi has also tried to calm the leaders of European consumer banks by setting up a multi-level deposit system that would prevent some banks from paying the central bank to park their reserves.
The bottom line: The measures will bring some relief to the banking system, said Axios Kathy Jones, chief fixed income strategist for the Schwab Financial Research Center.
The big question: Will it really be a lasting solution to the underlying problems?
- "Oh, no," Jones said with a warm laugh. "The problem is the demand and the means to stimulate it in a world characterized by the aging of the population, the demographic challenges, the slowdown in China, the trade wars, all that monetary policy really can not They can only fix what they can fix. "
Go further: The ECB likes inflation now
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