The Fed dashed bullish hopes of a stimulus-based rally on Wednesday. And from the sound of things, the ECB will do the same on Thursday.
According to Ed Yardeni of Yardeni Research the belief that ECB president Mario Draghi is about to unleash serious firepower is mistaken.
And that could leave bulls in a world of hurt.
Markets rallied in recent days on expectations of aggressive action, after ECB president Mario Draghi pledged to do whatever necessary to save the euro. “And believe me, it will be enough," he said at the time.
But esteemed market pundit Ed Yardeni says there’s something about the commentary that most investors don’t understand. The ECB doesn’t talk to the markets with the same sophistication as the Fed.
“I think Draghi just panicked after the spike in Spanish bond yields last week and made an off the cuff comment,” says Yardeni in a live interview on CNBC's Fast Money Halftime Report. “I think he just wanted to calm everyone down.”
But in his quest for calm Draghi may have acted too impulsively and not have thought about the ripple his commentary would have. In other words, he may not have realized it would be interpreted as the position of the ECB.
