Draghi muddies the waters

President Draghi failed to convincingly improve the ECB’s transparency last week. He added some detail to last month’s pledge that interest rates would “remain at present or lower levels for an extended period” by stating that markets’ expectations for a hike in late 2014 were “unwarranted”. But he made very clear that the commitment depended on the Bank’s inflation forecast and added to confusion by stating that the Governing Council might not repeat its pledge each month.