Mario Draghi has declared victory over deflation and moved a step towards winding down the European Central Bank’s ultra-loose monetary policy, sending the euro and German bond yields higher as investors bet on the end of crisis-era stimulus measures.
Facing growing pressure from monetary hawks in Germany, the ECB president said the bank decided to change its guidance to investors — omitting a reference to using all weapons in its policy arsenal — because of its success against a destabilising bout of falling prices.
Though the ECB agreed to keep interest rates at record lows, Mr Draghi said the bank no longer had a “sense of urgency” to take further action on monetary stimulus and that policymakers “do not anticipate that it will be necessary to lower rates further”.