ECB minutes show governing council agreed on need to prepare for policy easing

Author: Justin Low | Category: Central Banks

ECB releases the accounts of its June monetary policy meeting


  • Some ECB officials argued for more accommodative TLTRO terms
  • Noted a drop in market-based inflation expectations
  • There should be no room for complacency in the face of falling inflation expectations
  • There was a broad agreement on need to change stance
  • Also to demonstrate determination to act
  • Central bank should put more emphasis on symmetry of inflation aim
  • Potential measures include extending/strengthening forward guidance, resuming QE and cutting interest rates
After looking at the minutes here, it is no wonder why Draghi had to make his speech in Sintra last month. This continues the dovish rhetoric by ECB speakers and it looks like it could be any time that the central bank could just flip the switch and introduce more stimulus.

The statement after the meeting last month failed to shed much light on the issues but the central bank has pretty much communicated all of the above nuances via their speeches in the past few weeks. We're very much at a point now where the ECB already has its hands on the trigger. The question now is will they preempt the market on 25 July or move forward with easing right away.

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