The Latest: European Central Bank sees tariffs as key risk
FRANKFURT, Germany (AP) — The Latest on the European Central Bank’s monetary policy meeting (all times local):
European Central Bank President Mario Draghi says that trade conflicts are “the major source of uncertainty” for the global economy.
Draghi says increased tariffs coming about as part of a trade war could affect the economy by affecting business confidence and today’s complex value chains between companies across borders.
U.S. President Donald Trump has imposed new tariffs on some Chinese imports and on global imports of steel and aluminum. A threat to impose new tariffs on autos has been put on hold.
Draghi spoke Thursday after the ECB confirmed plans to phase out its monthly bond purchases by year end. The monetary authority for the eurozone left key interest rates unchanged at record lows and says it plans no increases till well into next year.
The European Central Bank has trimmed its economic growth outlook for this year and next.
ECB President Mario Draghi told a news conference Thursday that the bank’s staff growth projections had been trimmed to 2.0 percent from 2.1 percent for this year, and to 1.8 percent from 1.9 percent for 2019.
Draghi said that somewhat weaker demand from outside the eurozone was behind the slightly weaker output.
He said that nonetheless the 19-country eurozone was enjoying an “ongoing, broad-based expansion.”
He spoke after the ECB confirmed its plan to reduce its bond purchase stimulus to 15 billion euros ($17.4 billion) per month from 30 billion euros and to phase the program out at year-end. The monetary authority for the eurozone left interest rates unchanged at record lows.
The European Central Bank has confirmed it is halving its monthly bond purchases to 15 billion euros ($17.4 billion) as it scales back its post-crisis stimulus efforts before stopping them at the end of the year.
The chief monetary authority for the 19 countries that use the euro announced the decision Thursday after the decision by its 25-member governing council at the bank’s headquarters in Frankfurt.
The step was in effect already announced at the bank’s June 14 meeting. The bank set out its plans to halt the stimulus in December and postpone any interest rate increase until well after that. Analysts do not expect a rate hike until the second half of 2019 at the earliest.
The European Central Bank is expected to ratchet back its stimulus efforts again on Thursday as it gingerly phases out extraordinary support for the economy left over from the Great Recession and the euro currency union’s debt crisis.
The bank’s 25-member governing council is expected to cut its monthly bond-purchase stimulus to 15 billion euros ($17.4 billion) a month from 30 billion a month, on the way to ending the purchases at the end of the year.
The ECB is due to announce that step in a statement, after President Mario Draghi and other top officials pre-announced the bank’s upcoming moves at their last meeting on June 14. The ECB is also expected to underline its intention to not raise its interest rates until at least the middle of 2019.