ECB's Lane says that PEPP increase is proportionate response to the outlook
Comments by ECB chief economist, Philip Lane
- ECB stands ready to adjust all of its instruments as appropriate
- Market fragility underlines continued need for central bank to be flexible
- And also exercise a market stabilisation function to the extent as necessary
As soon as the yields spread starts to widen before the extra stimulus measures run out, expect the ECB to come back and pacify market participants once again.
As much as this programme is supposed to be temporary, I reckon the fact that any solid signs of an economic recovery in the euro area may take several years could easily push this towards the end of 2021 or even 2022.
Then, there's still QE and also negative rates, whereby the latter looks to be almost perpetual at this stage.