Lagarde Q&A: We are re-calibrating PEPP, not tapering

Author: Adam Button | Category: Central Banks

Responses to questions from the press

PEPP envelop
  • Asked whether this was a taper, she said it was a 're-calibrating'
  • "The choice of words is relevant. It is moderately lower than what we have done in Q2 and Q3."
  • Stimulus has been re-calibrated for three months
  • We are clearly seeing an improvement on many fronts
  • The day when PEPP is over, the job is not finished
  • We have not discussed will come after PEPP ends
  • PEPP decision was unanimous
  • Not seeing much in terms of wage rises
  • We expect bottlenecks to be bypassed in the first half of 2022
  • When PEPP comes to its end, we clear have all our other tools available (mentions APP)
  • Says they look at 5y5y inflation swaps but also at other measures
Here's a great chart from RBC showing how the ECB is basically forced into a taper.
Lagarde photo
Does this look transitory to Lagarde? European gas and power prices are at a record. Here's Spanish electricity, which is up another €10 today too.
Spain power pricesh/t @javierblas
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