There seems to be an inability of Central Banks to generate inflation. Take Mario Draghi and the European Central Bank.
This morning, ECB head honcho “Super” Mario Draghi pulled a Captain Obvious press conference.
(Bloomberg) — Mario Draghi signaled the European Central Bank probably won’t stop its quantitative-easing program without tapering it first, indicating that the stimulus is likely to run past the currently scheduled end-date of March 2017.
“An abrupt ending to bond purchases, I think, is unlikely,” the ECB president said in a press conference in Frankfurt on Thursday. A sudden stop “is not present in anybody’s mind.”
Thank you, Captain Obvious. None of us were expecting a sudden stop of Central Bank QE.
Europe has an inflation rate of 0.4%, below the ECB’s 2% target for inflation.
The US is having better success … at getting near 2% inflation (defined as Core PCE growth YoY). But the US is still only at 1.7% (still below the 2% target).
With low inflation and near zero cost of funding for banks, we have seen an explosion in non-interest bearing deposits at the big banks in the US.
And “All Quiet on the Western Front” on inflation.