Comments from Lagarde after the ECB's strategy review
- New "more narrative based" statement will replace introductory statement at ECB press conference
- 2% inflation is not a ceiling
- Link between monetary aggregates and inflation has weakened
- Regular review cycle will begin with next review planned in 2025
- "Symmetry means negative and positive deviation from the target are equally undesirable"
- This move isn't a clarification on policy "it's quite a lot"
- There is no longer any ambiguity
- Are we doing average inflation targeting? The answer is no
- "I don't think that by having this simple and solid 2% target, we are pushing out the actual tightening that would take place, no"
The ECB is way behind the Fed and a few other central banks on this shift, as usual.
Lagarde was asked if this was really a change or just a clarification and then began to outline a series of garbled points that were far-from-convincing.
As Frederik Ducrozet points out, it's not like the ECB hasn't talked about symmetry before:
The rise in the euro today also suggests the market isn't exactly believing the idea that anything has changed. Symmetry has been in every introductory statement since 2019.
