Reuters reports, citing unnamed ECB sources
- ECB has time to change rate guidance, TLTRO seen as priority
The report mentions that some policymakers at the ECB are reluctant to change their guidance on interest rates as it could tie the hands of the next president many months before an appointment is even made. Do be reminded that Draghi's term ends on 31 October this year and recently Weidmann is re-emerging as a contender once again to succeed him.
According to a source cited, "not knowing who is the next president is very much the reason for our hesitation".
More often than not, members of the governing council will stand by their president's decision/leadership so if they decide to change rate guidance now only to change it back again when the new president steps in, it'll confuse markets and I reckon that's what they are trying to avoid.
The fact that they now mention that they have time to change the rate guidance could rule out changes in the March meeting. And mention of TLTROs being a priority here should help to spur a bid in Italian bonds if anything else.
