ECB's de Guindos says if further de-anchoring of inflation expectations the Bank will react
Justin asked on Friday how long the European Central Bank will ignore the market gauge of long-term euro area inflation expectations, which fell to a fresh record low last week.
ECB Vice President Luis de Guindos spoke Italian newspaper Corriere della Sera on Saturday (report via Reuters) and tried to put on brave face:
- "What we need to see is a de-anchoring of inflation expectations"
- "This has not yet happened, despite the fact that there has been a drop in market-based inflation expectations"
- "If there is a further deterioration, then we will react, but for now, our monetary policy stance is fully compatible with both inflation and real activity."
Yeah right, nothin' to see here … sheesh.