ECB's de Guindos says if further de-anchoring of inflation expectations the Bank will react

Author: Eamonn Sheridan | Category: Central Banks

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."

European Central Bank ignore market gauge of long-term euro area inflation expectationsYeah right, nothin' to see here … sheesh. 

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