Investors were disappointed by the lack of action, amid growing market consensus that monetary policy has hit the limits of its effectiveness, according to Mitul Patel, head of rates at Henderson Global Investors.
“Market participants remain skeptical that central banks have the ability to boost future growth and inflation prospects, though central banks continue to try their best to convince us otherwise,” he said.
Although the ECB said extending its bond-buying program was not even discussed, Mr. Patel believes policy makers are likely to expand it beyond its end-date of March 2017. “Should the ECB extend asset purchases further, the scarcity of German government bonds available to buy will mean the eligibility criteria will at some point need to amended,” he added.
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