While the central bank is likely to extend its bond-buying program, an increase of current levels is unlikely given the improving economic conditions. The ECB revised up its growth forecast for the 2017 on Thursday from 1.9 percent to 2.2 percent – the strongest forecast yet since the start of the financial crisis.
It could also be impossible, according to some observers, who suggest that the central bank is running out of assets to buy.
Draghi attempted to quash these concerns Thursday by saying that the ECB stands “ready to increase our asset purchase program in terms of size and/or duration.” He also reiterated that the central bank had coped with the issue of scarcity before by tweaking its eligibility criteria.
Pictet’s Senior Economist Frederik Ducrozet noted that the bank was likely to shift its asset bias to account for this.
“Our impression is that the ECB is heading towards a change in QE composition favoring private debt at the expense of sovereign debt purchases as well as a greater use of the program’s flexibility in 2018,” Ducrozet said in a research note.
