FRANKFURT – European Central Bank officials warned of mounting economic risks and a climate of “general uncertainty” at their December policy meeting, even as they pushed ahead with plans to phase out the bank’s giant bond-buying program.
Global financial markets have seesawed in recent weeks as investors digested signs of softness in major economies like China and the 19-nation eurozone. Market moves have been aggravated by the actions of major central banks, including the Federal Reserve, which have moved to tighten monetary policy over the period.
ECB officials wrestled at their Dec. 12-13 meeting over how to respond to the mounting global uncertainties around trade, Brexit and volatility in financial markets.
“It was underlined that the situation remained fragile and fluid, as risks could quickly regain prominence or new uncertainties could emerge,” the minutes said.
Still, officials decided on balance that the medium-term outlook for the eurozone economy remained solid given strong labor markets and rising wages. The ECB, therefore, formalized an earlier decision to phase out the bank’s 2.5 trillion euros ($2.88 trillion) bond-buying program, known as quantitative easing, this month.