A 'sources' report from Reuters earlier made all the same points regarding Nagel as the battle lines are being drawn. It's clear that Nagel is in the minority but he could push to water down the new tool, which will be rolled out this month.
- Cautions against using monetary policy to limit risk premia of indebted states
- Monetary policy measures to combat fragmentation can be justified only in exceptional circumstances
- Anti-fragmentation tool must have narrowly-defined conditions and must be strictly temporary
- De-anchoring of inflation expectations has to be prevented no matter what
- Our current focus must be on very-high inflation rates
