Statement of March 7, 2019
DIW president Marcel Fratzscher on the European Central Bank's latest announcements:
The ECB and President Draghi have sent a remarkably clear warning signal about the weakening economy and the increased risks. The ECB decision makes monetary policy even more expansionary. I consider this wise and necessary in order to soften the economic slowdown somewhat. The announcement of the the new credit programme TLTRO-III comes earlier and is more expansionary than expected. I expect the ECB not to provide forward guidance on policy rates unless the economy slows down further. ECB monetary policy will for some time remain more expansionary than is currently expected by the German public. I don't expect policy rates to be raised before the end of 2020. The insufficient anchoring of inflation expectations is currently my biggest concern, which means that price stability in the euro area won't be restored before the end of next year.