ECB Likely To Push QE Through To 2017: Goldman

The European Central Bank is likely to extend its quantitative-easing program into 2017 as it battles with low inflation in the region, analysts at Goldman Sachs said in a report. The central bank's €60-billion-a-month asset purchase scheme was announced in January and is currently set to run until September 2016. However, ECB members have hinted more easing could be on the way if inflation stays below the 2% target for too long. "We continue to think that the euro area is more exposed to risks emanating from China in light of the direction of its exports, and low underlying inflation," the Goldman Sachs analysts said in the note dated Sept. 9. At the ECB meeting last week, central bank staffers downgraded their inflation forecasts and now expect inflation to get closer to 2% only in the second half of 2017. "The extension of the QE policy we now forecast is between one and two quarters, which, at a pace of €60 billion per month, amounts to, at most, €360 billion, or around a third of the current program," the Goldman analysts said.

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