The ECB hasn’t changed its mind on its monetary policy

Publié: 21 juillet 2017 dans Informations générales

Philippe Waechter's blog

The ECB remains committed for an extended period to a very accommodative monetary policy stance.
There is no strategic change in the ECB economic diagnosis on the Euro Area. The recovery is getting strength and risks are now balanced. But the inflation rate is still way below the ECB target at below but close to 2%. On this specific point the ECB explains that the low oil price is an explanation but it is not sufficient as the core inflation rate is still close to 1%. Draghi said the inflation should stay close to the current level (1.3%) in coming months. Therefore no convergence to the target is expected by the European Central Bank in a foreseeable future.
In other words, the recovery is strong for the real economy side but still very limited on the nominal side. As far as the inflation rate remains low, the monetary policy will…

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