- Public and private comments suggest upside revisions likely, though magnitude unclear
- Official to Econostream: 2023 inflation projection ‘needs to be significantly higher’
By David Barwick – FRANKFURT (Econostream) – This is an overview of policy-relevant comments made in the last two weeks by European Central Bank Governing Council members, in particular such comments as may indicate how the speaker would regard a reduction in 4Q of the volume of pandemic emergency purchase programme (PEPP) purchases:
2 September 2021
- President Lagarde Too Suggests Crisis Phase Ending, So 'No Longer a Question of Massive Support'
1 September 2021
By David Barwick – FRANKFURT (Econostream) – With just days to go until the members of the European Central Bank’s Governing Council will presumably start observing the quiet period ahead of monetary policy meetings, Council member François Villeroy de Galhau has apparently confirmed that observers should not expect much from the September 9 gathering except, as he strongly hinted, a slowdown in the monthly asset purchase pace.
31 August 2021
- Resilience to variant bolsters perception that emergency phase of pandemic petering out
27 August 2021
- PEPP end next March no foregone conclusion, but not yet close to needing to decide
- Governing Council could devote several meetings to discussing what to do about asset purchases
- Financing conditions seen to allow potential modest reduction in 4Q PEPP purchase pace
- Delta variant significance downplayed despite additional uncertainty
By David Barwick – FRANKFURT (Econostream) – Although the European Central Bank’s strategy review may have led to an inflation target that is clearer than its predecessor, it appears to be relying on a lack of clarity about another concept, namely underlying inflation.
20 August 2021
By David Barwick – FRANKFURT (Econostream) – Almost a month after the European Central Bank revised its forward guidance on interest rates to reflect its new strategy framework, the nature of the opposition of a small minority of monetary policymakers remains somewhat unclear, with the majority clearly united behind the idea that guidance must defer to reality over time.
19 August 2021
- ECB to set Q4 PEPP pace, but major announcements on future of QE less likely
- Council can start discussions, but these to continue in the autumn
- Major decisions in September would be seen as rushing things unnecessarily
- August holidays leave little time to lay groundwork; uncertainty still elevated
- Neither cliff effects nor new forecasts seen forcing major decisions in September
Following is the full transcript of the interview conducted by Econostream on July 27 with Sir Robert Stheeman, Chief Executive Officer of the UK Debt Management Office.
9 August 2021
- ‘Have begun to detect some market interest in a curve extension’
- But any curve extension ‘very much incremental only’
- ‘Might well be’ worth issuing new ultra-long-end linker this year, but must listen to market
By David Barwick – FRANKFURT (Econostream) – Whether the European Central Bank’s pandemic emergency purchase programme (PEPP) ever really needs to end could theoretically be an open question, based on ECB Vice President Luis de Guindos’ latest comments on the subject.
30 July 2021
By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Fabio Panetta may have crossed a line on Thursday by appearing to advocate wilful overshooting of the ECB’s inflation target.
29 July 2021
Following is the full transcript of the interview conducted by Econostream on July 28 with Mārtiņš Kazāks, Governor of Latvijas Banka and member of the Governing Council of the European Central Bank.
29 July 2021
- ‘What we have learned from the past is that we should not make the mistake of premature tightening’
- On inflation, ‘I would be somewhat more optimistic towards the end of the forecast horizon’
- New forward guidance has ‘provided more clarity, but without tying our hands’
Following is the full transcript of the interview conducted by Econostream on July 27 with Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania and member of the Governing Council of the European Central Bank.
28 July 2021
- What’s important is ‘Eurosystem is ready and can act forcefully to address fragmentation when it’s needed’
- Will certainly discuss asset purchases in the Council later this year when we debate about the PEPP
- Moderately and transitory ‘not about the number at a given moment; it’s about the intention’
By David Barwick – FRANKFURT (Econostream) – Thursday’s meeting of the European Central Bank’s Governing Council will be a matter more than anything else of taking a first and important stab at the question of how the new strategy is to shape monetary policy. The answer is less likely to please the hawks, but the doves should take care not to overplay their hand.
20 July 2021
By David Barwick – LJUBLJANA (Econostream) – If the going gets tough for the hawks at the European Central Bank Governing Council’s monetary policy meeting next week, their Slovakian and Slovenian colleagues seem unlikely to come to the rescue.
16 July 2021
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member and Banca d’Italia Governor Ignazio Visco on Thursday shared his interpretation of the outcome of the ECB’s monetary policy strategy review, an interpretation naturally favouring monetary accommodation but otherwise thoroughly redolent of his traditional diagnoses and prescriptions.
15 July 2021