ECB publishes its account of its June monetary policy meeting

  • Meeting decision and statement
  • Given uncertainty, prudent to leave end of QE conditional on incoming data
  • Rates to stay at current levels as long as needed to raise inflation towards target
  • Open-ended character of interest rate guidance should be emphasised
  • Governing council saw impact of asset purchases on inflation as waning
  • Widely cautioned that slowdown was likely to extend into Q2 for some countries
  • That implies near-term risks
  • Policymakers were in unanimous support of policy proposals
  • Risks to growth outlook is broadly balanced even if global risk factors increasingly prominent

Pretty much a repeat of what we already know from the ECB, but further emphasis on the fact that the end of QE - although widely expected to be at the end of this year - is no done deal just yet.

No further clarification to the rate guidance of "through the summer of 2019" as well. That makes yesterday's report here even more difficult to decipher. And the fact that the minutes say that all policymakers were unanimous on the policy proposals makes it even more less credible, though rate guidance can be seen as a separate issue to policy itself.

I think the fact that they mention it being open-ended leaves a lot to the imagination of each individual member. But that just means that it is going to send mixed signals to the market. Oh well, not something worth getting into for now until we get official word from ECB members themselves.

Other than that, they still have an upbeat outlook on inflation but remain wary on growth prospects in Q2. Should those worries on growth feed into 2H 2018 outlook, you have to wonder if they'd be able to justify ending QE this year - what more talk about rate hikes "through the summer of 2019".