ECB’s Panetta: Still a long way from the neutral rate

• If domestic demand remains weak, inflation could fall well below 2%.
• The ECB should move to neutral monetary policy stance, or even expansionary if necessary.
• Eurozone economic activity remains weak, no turning point in sight for beleaguered manufacturing sector.
• The tightening bias in our official description of the monetary stance is no longer necessary.
• The ECB should return to more traditional, forward looking approach to monetary policy.
• Directional guidance from the ECB would help consumption and investment.
• The ECB needs to give more explicit indications of its rate policy intentions.

This article was written by Giuseppe Dellamotta at www.forexlive.com.