ECB: PEPP more efficient than a rate cut in the current pandemic conditions

Author: Justin Low | Category: Central Banks

ECB publishes the account of its December monetary policy meeting


  • All members agreed that additional support was needed
  • Uncertainty remains high and positive sentiment could erode quickly
  • It was widely considered appropriate and proportional to increase the horizon of net purchases under PEPP
  • Risks of an unanchoring of inflation expectations were salient
  • Some argument were also made in favour of a larger PEPP envelope
  • Concerns were voiced over risks related to developments in the exchange rate
  • Full account
Besides more suggestions that ECB policymakers are keeping a watchful eye on the euro, the discussion on PEPP was largely in line with what was reported last month. All in all, there isn't much here at first glance to suggest a change in the ECB narrative for now.

In any case, Lagarde's remarks from yesterday also made that rather clear to the market.

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