As the Federal Reserve looks to scale back its influence on the economy, the European Central Bank hinted at additional stimulus measures ahead. After wrapping up its September meeting, ECB President Mario Draghi said the central bank is keeping its benchmark interest rate unchanged and reiterated the flexibility of its quantitative easing program, according to a Thursday press conference. ‘Draghi was more dovish than one might expect,’ said Angus Campbell, senior analyst at FxPro, based in London. ‘He was very clear in saying that while the economic recovery is expected to continue, it is going to be quite a bit slower than previously thought.’ The ECB also lowered its growth and inflation forecasts for 2015. It now expects the eurozone economy to grow 1.4 percent, compared to the 1.5 percent expectation made in June. Consumer prices are set to grow just 0.1 percent compared to the 0.3 percent forecast back in June. But the ECB’s economists say the inflation rate should jump to 1.1 percent in 2016 and 1.7 percent in 2016. In order to lift inflation, the ECB announced a massive $1.2 trillion bond stimulus program in March, known as quantitative easing. It’s set to run through September 2016 with the goal of lifting inflation, which is close to deflation status. ‘The 1.7 percent inflation forecast in 2017 is after the ECB stops its QE program,’ Campbell said. ‘1.7 percent is still off the ECB’s 2 percent target, so that forecast suggests QE is here to stay beyond September 2016.’
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