April 26, 2019 / 8:11 AM / 2 months ago

Investors may be doubting effectiveness of ECB policy - Rehn

HELSINKI, April 26 (Reuters) - Investors may be doubting the effectiveness of the European Central Bank’s monetary policy measures in boosting inflation, ECB rate-setter Olli Rehn said on Friday.

Rehn, one of the names in the race to replace ECB President Mario Draghi, said stubbornly low inflation expectations may not only reflect years of low price growth but also investors’ misgivings about the central bank’s own policy.

“Firstly, long-lasting slow inflation may have lowered inflation expectations durably and even so that they are easily moving downwards,” Rehn said in the Finnish central bank’s annual report.

“Secondly, markets may find that monetary policy measures are not, under the current circumstances, effective enough to accelerate inflation.”

He also cited the perception that the ECB would sooner tolerate missing than exceeding its price growth target of just under 2 percent - an interpretation that Draghi himself was at pains to deny in his last news conference. (Reporting by Anne Kauranen; Writing by Francesco Canepa in Frankfurt; Editing by Alison Williams)

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