Remarks by ECB policymaker, Klaas Knot
- If baseline projections hold up, ECB can start phasing out PEPP from Q3
- May look to end purchases in March 2022
- There is good reason to expect robust recovery in 2H 2021
- Comfortable with current level of financing conditions
- The end of PEPP is not the end of ECB accommodation
- Sees no case for modifying other instruments like QE or forward guidance
Putting the headline aside, those are quite hawkish remarks but then again it is Knot - he is known to be one of the more hawkish members on the governing council.
I don't think they would like to put a firm date on when the phase out PEPP yet so take these words with a pinch of salt. But if we do see a stronger performance in the euro area during the second-half, perhaps we can revisit this again in the months to follow.
