• Must avoid vicious disinflation cycle
  • ECB hasn’t exhausted all policy instruments
  • ECB sought euro impact with recent decisions
  • Euro has fastest transmission on inflation expectations
  • Current package is “limited QE” (QE lite)
  • Need to see if latest measures are enough (like they waited to see if previous measures were enough
    ;-)
    )
  • Changing gears on fiscal-policy side not helpful
  • Euro countries lack progress on structural reforms
  • Rate cut designed to bolster TLTRO take up
  • ECB Sep projections a bit on the optimistic side
  • Will initially rely on others for ABS buying
  • Fed’s data driven guidance created problems

ECB’s Luc Coene speaking to Bloomberg