Mario Draghi says ECB QE won’t end early, market volatility isn’t going away anytime soon, and there needs to be a ‘strong agreement’ in Greece

ECB European Central Bank President Mario Draghi
European Central Bank President Mario Draghi. REUTERS/Ints Kalnins

Mario Draghi just wrapped up his press conference following the European Central Bank’s latest monetary policy decision.

In his opening remarks, Draghi said that low oil prices should help private consumption and demand, and said that the decline in the euro is expected to bolster trade for euro area countries.

Draghi also said that inflation bottomed out earlier this year, and while inflation is expected to increase later this year, it will remain low in the coming months.

In his conference, Draghi added that the ECB has not been surprised with the rebound in inflation in the euro area.

The ECB’s outlook for inflation was increased for 2015, to 0.3% from 0%, while the 2016 and 2017 inflation outlooks were unchanged.

Draghi outlined that the ECB sees GDP growing 1.5% in 2015, 1.9% in 2016, and 2% in 2017. The 2015 and 2016 forecasts are unchanged, while the 2017 forecast is a 0.1% downgrade from the ECB’s March outlook.

The ECB kept interest rates unchanged earlier on Wednesday, as expected. The bank maintained a -0.2% deposit rate, a 0.05% main refinancing rate, and a 0.3% marginal lending facility rate.

As he has in past press conferences, Draghi again said that for a broader turnaround in euro area economies, structural fiscal reforms are needed in order for companies and households to take advantage of the ECB’s current easy monetary policy stance.

In response to a question on Greece, Draghi said there needs to be a “strong agreement” between Greece and the ECB, by which he said an agreement which has strong reforms, social fairness, fiscal sustainability, and financial stability for the Greek economy. Draghi added the ECB wants Greece to stay in the euro and said there is a “strong will” for Greece and its creditors to find an agreement.

With regard to the leak of comments from ECB official Benoit Couere, Draghi said it was a “mistake” and said there will certainly be a change to rules regarding meetings between ECB officials and investors. In that situation, Couere gave a speech to investors a full day before it was set live on the ECB site.

Draghi also said that markets must get used to periods of higher volatility, and said the ECB is unanimous on looking through short-term market trends. In the last month, yields on many euro area government bonds, notably German bunds, have risen sharply.

With regard to the ECB’s quantitative easing program of buying €60 billion of bonds each month, Draghi said there are no plans to end the program early, and the ECB has not discussed an exit plan. Draghi called an exit plan a “high-class problem” and said we are a long way from that.

The ECB has said its QE program will run through September 2016, and Draghi added that the ECB currently sees no reason to add to its QE program.

NOW WATCH: Here’s what happens when you get bitten by a black widow