The efficacy of Mario Draghi’s quantitative easing program is back on the headlines. Economic forecasts unveiled by the European Central Bank president yesterday were even weaker than those in March, just before the 1.1 trillion-euro bond-buying plan started.

The slowdown in global trade and slump in oil prices threaten to reduce inflation significantly, which according to Draghi however should also have the effect of increasing disposable income. As a result, the warning that we may have deflationary periods was sent out.

Incoming data shows that the 19-nation euro-area economy is in better shape than it has been for years, and the fact that the recovery isn’t yet translating into sturdier price growth is a problem that’s affecting every major global central bank.

In response to this concern, the governing council has agreed to expand the magnitude of the current QE program, by increasing the percentage of ownership that the ECB can have in individual bond issues. Markets reacted very positively to the news, with equity markets rallying over 3% percent in Europe. Similarly, investment grade and sovereign bonds rallied also.

In terms of the future expectations of the general health of the Euro Area, a more alarming tone was sounded. Draghi found himself announcing downgraded staff forecasts in Frankfurt after a summer scarred by emerging-market turmoil from China’s stock-market slump and a slide in commodity prices. Rather than confidently predicting the gradual rise in growth and inflation that the ECB pledged would accompany QE, he had to acknowledge that the outlook has deteriorated.

The ECB now foresees consumer-price growth of 1.1 percent in 2016, compared with its March forecast of 1.5 percent. Inflation in 2017 was downgraded to 1.7 percent from 1.8 percent. The ECB’s goal is just under 2 percent. The economic-growth outlook for 2016 was shifted down to 1.7 percent, compared with 1.9 percent in March, and for the following year to 1.8 percent from 2.1 percent.

Yet the ECB’s 25 policy makers held off from responding immediately to the worsening situation. Firstly, Draghi explained that with so much financial-market volatility in recent months, it’s impossible for ECB officials to separate short-term noise from the longer-term economic signal.

An interesting question that emerged during the Q&A session of the conference is whether the ECB should consider revising its 2% percent inflation target, and whether there have been further discussions about the viability of the target itself. In response to this Draghi said "It would test our credibility if we were to change the target when it's taking more effort to achieve that target,” "There hasn't been any discussion about changing the target of inflation." With the ECB cutting its own forecasts for the next three years, however, it could be time the central bank faced up to reality and admitted defeat.