The European Central Bank dropped a reference to lower rates in its monetary policy decision June 8, and President Mario Draghi said risks to growth were now "broadly balanced," in a first sign that the period of extraordinarily accommodative monetary policy might be drawing to a close.
"The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases," the ECB said in a statement. It removed a reference in previous monetary policy decisions to the possibility that rates might be cut.
"The risks to the eurozone growth outlook are seen to be broadly balanced," Draghi said in the introductory statement to his press conference. Previously, the ECB had said risks were tilted to the downside.
The ECB reiterated its plan to continue monthly asset purchases to €60 billion until the end of December, or beyond, if necessary, adding that it "stands ready to increase the program in terms of size and/or duration."
It also left its key interest rates unchanged June 8, including its negative 0.4% deposit facility rate. The rates on its main refinancing operations and marginal lending facility remain at zero percent and 0.25%, respectively.
The ECB revised up its staff forecasts for growth in the eurozone, but cut the outlook for inflation, citing lower oil prices. It now expects real GDP to increase by 1.9% in 2017, by 1.8% in 2018 and by 1.7% in 2019. It sees annual inflation at 1.5% in 2017, 1.3% in 2018 and 1.6% in 2019.