Gold Silver Reports (GSR) – Draghi Ends ECB Bond-Buying Era Saying Economy Can Beat Risk — Mario Draghi said the euro-area economy is strong enough to overcome increased risk, justifying the European Central Bank’s decision to halt bond purchases and close an extraordinary chapter in the decade-long struggle with financial crises and recession. The euro fell after the central bank also pledged to keep interest rates unchanged at current record lows at least through the summer of 2019, a longer timeframe than investors had priced in. Policy makers will phase out bond purchases by the end of this year in what Draghi described as a unanimous decision.
By pushing ahead with a stimulus exit, officials are betting that the euro-area economy is robust enough to ride out an apparent slowdown amid risks including U.S. trade tariffs and nervousness that Italy’s populist government will spark another financial crisis.
“We’ve taken these decisions knowing that the economy is in a better situation, with an increase in uncertainty,” Draghi said at a briefing in Riga, where the Frankfurt-based ECB held its annual out-of-town meeting. While the recent economic “soft patch” may last longer, that doesn’t change the view of underlying momentum, he said. – Neal Bhai Reports (NBR)
