Draghi’s criteria for further easing already met

Last week, January’s ECB minutes were published, revealing that all members of the Governing Council thought that it was necessary to reconsider the monetary stance. Separately, President Draghi set out two criteria that would inform the Council’s decision: the pass-through of low imported inflation and the transmission of monetary policy via banks. We think that both of these criteria suggest that the ECB will significantly increase its monetary stimulus next month.