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The Goldman Sachs Analysts offer a sneak peek at what to expect from next Thursday’s European Central Bank’s (ECB) monetary policy decision.

Key quotes

“We expect the ECB will step up the pace of PEPP purchases to lean against tightening financial conditions, but believe it will keep rates on hold until 2H25.”  

“We expect the ECB to adopt a symmetric 2% inflation aim but include “soft” elements of Average Inflation Targeting (AIT) by placing some emphasis on persistent inflation misses when the strategy review concludes in September.”  

“On the fiscal side, we expect the EUR 750bn Recovery Fund, which will provide fiscal support to the countries most affected by the virus, to be ratified and disbursement to begin in Q2.”