European Central Bank President Mario Draghi used a speech in New York on Friday to clarify the central bank's less-than-expected policy announcement from Thursday. Bobbi Rebell reports.
European Central Bank President Mario Draghi used a speech at the Economic Club of New York on Friday to clarify the central bank's policy decision a day earlier. It had included only a small deposit rate cut and an extension of its asset purchase program. This disappointed investors who had expected more aggressive action, sparking Thursday's selloff in Europe and the U.S. However, Draghi made it clear that the door is open for more, if needed. (SOUNDBITE) MARIO DRAGHI, PRESIDENT, EUROPEAN CENTRAL BANK (ENGLISH) SAYING: "QE is there to stay. And, if needed, it could be recalibrated. And, like, by the way, any of our instruments, like it happens with all monetary policies in everywhere in the world." Markets reacted positively, with the major indexes up around two percent after Draghi's comments. Fact and Opinion Economic's Bob Brusca: (SOUNDBITE) ROBERT BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMIC (ENGLISH) SAYING: "I think that markets had, they needed to sort of unwind some of what they did yesterday, because, I think, that was excessive. That was purely an announcement effect, and there isn't any reason that you should have had that kind of magnitude." That said, Brusca says more stimulus is needed in Europe, but that Draghi may have a hard time getting political support especially from Germany, where the economy has been gaining strength.