ECB’s Nowotny urges caution as QE decision nears

2017 10 04T102726Z 1 LYNXNPED930RR RTROPTP 0 AUSTRIA CENBANK 1 - ECB’s Nowotny urges caution as QE decision nears
European Central Bank (ECB) Governing Council member and OeNB governor Ewald Nowotny addresses a news conference in Vienna, Austria, June 9, 2017. REUTERS/Leonhard Foeger

October 4, 2017

VIENNA (Reuters) – European Central Bank policymaker Ewald Nowotny called on Wednesday for a cautious approach to monetary policy avoiding sudden changes, as the central bank moves towards a decision on the future of its quantitative easing program.

With the bank’s asset purchases due to end in December, ECB policymakers will meet on Oct. 26 and are likely to debate the merits of extending the scheme for a relatively long period but with smaller monthly purchases, or keeping bigger monthly buys for a shorter extension.

“We are aiming for the perspective of a cautious normalization,” Nowotny said, adding that the central bank’s target of inflation just below 2 percent should be seen only as a medium-term objective.

“Caution means not hitting the brakes abruptly but slowly taking your foot off the pedal.”

(Reporting by Francois Murphy; editing by John Stonestreet)

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