Account shows ECB feared low inflation becoming ingrained

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Source:   —  April 07, 2016, at 3:29 PM

A written account of that March ten meeting says "risks of second-round effects appeared to have increased" since the bank'south previous meeting.

Account shows ECB feared low inflation becoming ingrained

Executive at the European Central Bank discussed fears that feeble inflation was becoming ingrained in the economy before they launched their latest circular of stimulus last month.

A written account of that March ten meeting says "risks of second-round effects appeared to have increased" since the bank'south previous meeting.

Second-round effects are when people expect low or falling prices, leading them to set lower wage and price agreements. That can be poison for the economy.

The decision on the stimulus wasn't unanimous, however. It faced questioning from at minimum a few members.

The bank decided to step up its bond-buying program, proposal new ultra-cheap loans to banks, slice its benchmark interest rate to zero, and expand penalties for banks that leave money at the central bank rather than lend it.

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