According to the European Central Bank’s Monetary Policy Meeting accounts, there was a broad agreement that the ECB needed to be ready and prepared to ease policy further as appropriate. “Potential measures included extending and strengthening guidance, resuming APP and cutting rates,” the ECB said.
With the initial reaction, the EUR/USD pair retreated slightly from session tops and was last seen trading at 1.1270, adding 0.2% on the day. Below are some key takeaways from the publication, as reported by Reuters.
“There should be no room for complacency in face of fall in market inflation expectations.”
“Costs of negative rates outweighed by benefits but this might not hold for lower rates or longer horizons.”
“There was broad agreement on need to change stance, demonstrate determination to act.”
“Some nuances were expressed about individual elements of policy package.”
“Value of calendar-element of guidance could be seen to be diminished.”
“Some arguments were made for pricing TLTRO in line with previous round.”
“President ascertained that all members agreed with overall policy package.”
“If low inflation continues to prevail, considerations of more strategic nature might be warranted.”
“ECB should put more emphasis on symmetry of inflation aim.”
“Care should be taken so this could not be seen as moving goalpost when it proved challenging to achieve it.”
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