Draghi chose the most cautious option - ING

Carsten Brzeski, Chief Economist at ING, pointed out that hte ECB meeting “set a new milestone in terms of buying time” and explained that Draghi chose a cautious option. 

Key Quotes: 

“The unexpected drop in soft and hard data seems to have created new uncertainty at the ECB as regards the future path of monetary policy. It is very hard to believe but according to ECB President Mario Draghi, the ECB did not discuss the monetary policy outlook at all. The most cautious version of buying time, avoiding new speculation and really saying nothing.”

“The largest part of the ECB’s introductory statement was a verbatim copy of the March statement.”

“Draghi did not send any signals regarding next steps. He did not even confirm earlier statements that there would not be any abrupt end to QE in September. By saying that the ECB did not discuss the outlook for monetary policy, Draghi chose the most cautious option to avoid any misguidance.”

“In our view, the June meeting will be crunch time for the ECB. With the next round of growth and inflation projections, the ECB will have a better view on whether weak economic data was just a soft patch or the start of a downswing and on whether inflation moving to 2% is still more wish than reality.”

“Given the ECB’s previous preference for a rather piecemeal approach in its communication, crunch time could easily be postponed to July or even September. The good thing is that saying nothing at all, like today, does not look like an option in June.”