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Draghi: If inflation drop continues, risks for price stability would increase and governing council would need to use all available tools
• Drop in European inflation due to temporary factors such as Ukraine and energy • Most effects depressing inflation are temporary • New ECB lending programs to banks will be ineffective in helping economy without govt structural reforms Draghi is dovish on the headline but he’s brushing off the inflation risks once again. The ECB proved to be behind the curve when they blamed temporary factors before and now market-based measures of inflation are flashing warning signs. Nothing here is new or particularly dovish (although I like selling the euro) but there’s a growing risk that eventually the ECB allows ... (full story)