Lagarde Q&A: We are re-calibrating PEPP, not tapering
Responses to questions from the press
- 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.
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.