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ECB: a large number of members felt that current inflation developments call for urgent measures


  • The ECB publishes the minutes of its March monetary policy meeting

Justin Low

Thursday, 07/04/2022 | 11:33 GMT-0

07/04/2022 | 11:33 GMT-0

  • Monetary policy stance remained very accommodative
  • Many members felt that the current level of high inflation called for further immediate steps towards policy normalization
  • It has been argued that for all intents and purposes, three forward guidance conditions have been met
  • A longer period of above-target inflation would lead to an increased risk of upside unanchoring
  • In such circumstances, the ECB could no longer afford to look through inflation
  • It was estimated that APP purchases had now reached their stated goal
  • Nevertheless, it is considered wise to retain a two-sided option on the policy
  • Full account

There are some hawkish mumbles based on the above remarks, but recent comments from the ECB do not suggest that policymakers are too eager to push the agenda. So that makes things a bit confusing in my opinion. I wouldn’t say much has happened in the past four weeks, but it certainly has.

If the ECB thought rate hikes might do it any good, it certainly doesn’t share such a strong view on that right now.

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