ECB's Stournaras: Lagarde will probably keep stimulus going

Author: Justin Low | Category: Central Banks

Comments by ECB governing council member, Yannis Stournaras

  • Lagarde will probably keep up ultra-loose policy and stimulus
  • There are strong monetary, economic and financial arguments for that
  • Says benefits of taking action now exceeds to a large extent the costs
  • Stimulus package last week was necessary because inflation remains very low
  • Also, inflation forecasts remain far below ECB's objective
  • Countries which have the means to add budget stimulus should step up to the plate
Just be aware that Stournaras is one of those who voted in favour of the entirety of the decision made last week, so his comments above don't come as a surprise.

I don't think he offers a better insight on what we can expect from Lagarde but there is a good argument to keep the current trajectory of monetary policy while pursuing changes on the fiscal front by working with governments.

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