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No discussion of the course of future monetary policy, ECB's Draghi says
Rate-setters in Frankfurt opted to keep a steady hand on the tiller, by not reading too much into the recent softness in some economic indicators while expressing continuing confidence in the outlook, both for activity and on the outlook for inflation.
Nevertheless, during his post-meeting press conference, European Central Bank chief Mario Draghi explicitly said the Governing Council was "concerned by recent developments" and that the extent of the recent slowdown in various surveys of activity had been "unexpected".
In their introductory remarks before the presser, Draghi and vicepresident Vitor Constancio also made explicit mention of the potential risks to the economy from protectionism overseas.
And at another point in their press conference, they indicated that they would continue to monitor developments in the "exchange rate and other financial conditions".
In line with all of the above, according to Draghi, in a response during Thursday's Question and Answers session, there was no disccussion at the GC meeting about the future pace of monetary policy.
Commenting on Draghi and Constancio's press conference, Barclays Research said: "The Governing Council remains confident about the outlook for growth and inflation, but considers that the soft patch recorded in Q1 warrants monitoring.
"[...] We believe that if there are no further negative surprises, by July the ECB will be in a position to announce the tapering of the APP programme and begin to provide some hints on the future policy rates path."
Holger Schmieding at Berenberg appeared to be of a broadly similar view, telling clients: "Despite emphasising downside risks more than before, the ECB tried to not sound overly concerned.
"[...] Going forward, we expect the ECB to adjust its guidance and policy stance in a series of baby steps. If the trade tensions are largely resolved over the next six weeks, the Eurozone economy can rebound in the summer from its current dent to growth. With core inflation like to rise gradually [...]."
Both Barclays ECB and Berenberg believed the GC would likely be finished tapering its quantitative easing programme by end-2018 with the first hike in the deposit rate likely following six months afterwards.