German finance minister Wolfgang Schäuble has called on the European Central Bank (ECB) just a day before the central bank is set to announce its monetary policy decision. He has called on the central bank to dump its bond buying program and negative rates saying that the Eurozone has become strong enough to handle normal monetary policy.
The European Central Bank (ECB) is currently purchasing bonds under Public Sector Purchase Program (PSPP) in the tune of €60 billion per month and kept the deposit rate at -40 basis points. If not extended, the bond buying program will end this year in December. However, the majority of the analysts expect the European Central Bank (ECB) to take up more gradual approach when it comes to the program as abrupt ending could send shockwaves through the European bond market and pop the euro higher, which will again make the inflation target difficult to achieve. ECB will announce its decision on Thursday.
The financial market is currently pricing no rate hikes from the ECB until 2019, but even then, ECB will have to wind up its bond purchase program by the end of next year.


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