The European Central Bank should continue QE net purchases until the end of the year and keep it open-ended to cushion the fallout from any conflict in Ukraine, ECB policymaker Yannis Stournaras told Reuters.
This is the first sign of a dovish shift at central banks. The Greek central bank leader said the economic outlook was now much more uncertain.
The ECB had been expected on March 10 to tee up a September end to asset purchases with markets leaning towards a December rate hike.
He offered a hint of how they might justify not hiking during an inflationary spike:
"In my view it is going to have a short-term inflationary effect – that is prices will increase due to higher energy costs," Stournaras said.
"But in the medium to long term I think that the consequences will be deflationary through adverse trade effects and of course through the rise in energy prices."
The market is sniffing out the multitude of risks in Europe and the euro is the laggard today.
As for the US, Mohammed El-Erian was on TV today saying 50 bps is off the table, along with calls for 8+ rate hikes this year.