As expected this morning by many analysts, after much ado, the ECB ended up keeping its key policy unchanged and continues to see PEPP purchases "continue at a significantly higher pace" at least for the current quarter, which means that the ECB's accommodative policies remain in place for the summer with bond purchases continuing at a “significantly higher” pace in Q3 and ahead of the September strategy review.
The interest rate on the main refinancing facility and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively. The Governing Council will continue to make net asset purchases under the Pandemic Emergency Purchase Program with a total EU budget of 1.85 t until at least the end of March 2022.
The key sentence of the release is: “Based on a joint assessment of financing conditions and inflation outlook, the Governing Council expects net purchases under the PEPP in the next quarter to continue to be conducted at a significantly higher pace. compared to the first months of the year, "
The Governing Council will continue to make net asset purchases under the Pandemic Emergency Purchase Program (PEPP) with a total budget of € 1,850 billion at least until the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over. Based on a joint assessment of financing conditions and inflation outlook,
The Governing Council expects net purchases under the PEPP in the next quarter will continue to be conducted at a significantly higher pace than in the first months of the year, ”the European Central Bank said in a statement. Compared to the April press release, only one word has changed….
At the same time, if inflation remains hot, we have a deadline, September 30th. After that date, the “Continued Acceleration” of bond purchases could cease, especially if inflation exceeds 2% in Germany for several months. The pressures of the austere countries would become too strong, and even a currently soft Board could not resist.
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/bce-molto-rumore-per-nulla/ on Thu, 10 Jun 2021 14:09:58 +0000.