ECB May End QE in 2018 if Growth Continues in Europe

The European Central Bank may end its stimulus program this year if the euro zone economy continues to grow strongly, ECB rate-setter Ewald Nowotny told a German newspaper.

The ECB has said it will buy bonds at least until September and it is widely expected to wind down the 2.55 trillion-euro scheme, the centerpiece of its efforts to revive inflation in the euro zone, after that.

Nowotny’s comments, echoing those of board member Benoit Coeure at the weekend, are likely to help cement those expectations.



“If the economy continues to do so well, we could let the program run out in 2018,” Nowotny told Sueddeutsche Zeitung in an interview carried out before Christmas and due to be published on Wednesday.

The ECB’s stimulus has helped pull the euro zone back from the brink of deflation, with price growth now comfortably above 1 percent.

Even if the inflation rate is still expected to miss the ECB’s target of close to but below 2 percent for years to come, Nowotny said policymakers should be flexible about it.

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the nagribahFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.