Comments by ECB president, Christine Lagarde
- Assumptions of underlying forecasts are still correct
- Forecasts were based on lockdown measures until end of Q1
- Some of the uncertainty has been cleared, such as Brexit, US election, vaccine
- Start of the year is more positive than some would argue
She talked up some optimism on how the year is starting and how some of the uncertainty has been removed, but countered that by saying that all of this just fits into their view in December i.e. all going to plan and no need for any change in policy stance just yet.
Meanwhile, Villeroy is out with more remarks in saying that the ECB needs the ability to exceed 2% inflation temporarily. I'm guessing he's referring to that being the case before they can consider tightening policy following the scaling back of emergency measures.
As much as there is a strong case for inflation pressures to build up this year on higher energy prices and the expiry of the German VAT cut, it is still a daunting task:
