Draghi fails to define “extended period of time” and takes dig at markets
ECB president Mario Draghi has said there is no exact deadline for “extended period of time” when describing the central bank’s forward guidance policy beyond an assessment of the "medium term" inflation outlook.
When asked if the council discussed tying forward guidance to thresholds or triggers, he answered indirectly to the negative, replying that there was no discussion of setting specific targets. "We actually only discussed forward guidance," he said.
He was also asked if there was a discussion over cutting interest rates. His reply was cryptic.
We haven't reached zero. We have given forward guidance based on the medium outlook on inflation and economic activity. Interest rates will stay where there are or go lower. This is valid for an extended period of time. There is no precise deadline for this extended period of time.
And Draghi took a dig at the markets, saying that he would not have to repeat forward guidance every month if the council thought they understood it would remain the same until an announcement of change.