ECB's Weidmann: ECB should only react to low inflation in the event of 2nd round effects; ECB should not overreact to a fall off in inflation which is largely due to cyclical factors
- German press- Sees much of the falloff in euro zone inflation attributed to energy and food prices.
- Does not see euro zone in a cycle of deflation.
**NOTE Mar 25th: (EU) ECB's Weidmann (Germany): ECB would be in uncharted territory if it were to adopt QE, ECB needs to respect the limits of its mandate
- Markets are rewarding the eurozone for reform progress, and all indications are that the eurozone recovery will continue.
- Still too early to say eurozone debt crisis is over.
- Broad deflation risks are very limited.
- Current EUR FX level does not warrant monetary policy action. Current ECB monetary policy remains expansive.