Lagarde Q&A: Our views are largely the same as in March

Author: Adam Button | Category: Central Banks

Lagarde answers questions after the ECB decision on April 22, 2021

  • Vaccination pace is improving but we're also seeing more pressure on economic and health sector from virus
  • We're also seeing risks from variants
  • We still have this overall environment of uncertainty and that's very much reflected in the consumer
  • We have a service sector that seems to be bottoming out
  • We still see near-term risks tilted to the downside and medium term risks much more balanced, the same as March
  • We did not discuss any phasing out of PEPP
  • PEPP purchases are data dependent, it depends on financing conditions and the inflation outlook
  • Obviously we look at what other central banks do (in response to BOC question). Each country has its own variables "I'm referring here to fiscal policy"
  • I don't know what the normal pace of PEPP is
Lagarde was asked about slowing PEPP purchases but she didn't offer any hints, except to say that the assessment was largely the same as it was a month ago. She later emphasized that there's no 'normal' level, it's all about preserving financing conditions.

The euro climbed to a session high at 1.2067 as she was taking questions. There wasn't anything in there to spark a spike, I suspect some EUR/GBP selling at work.

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