ECB's Lane: Tolerating longer phase of lower inflation would be costly and risky
|The current surge in infections and the re-imposition of containment measures serve as warning signals that the recovery path will still be long and fraught with risks, European Central Bank's (ECB) chief economist Philip Lane said on Thursday, per Reuters.
Additional takeaways
"The PEPP and the easing of conditions under the TLTRO programme have been the two cornerstones of our monetary policy response."
"Monetary policy continues to have a clear role to play in ensuring the preservation of favourable financial conditions."
"Absent our monetary policy measures, euro area output would be 1.3 percentage points lower and the annual inflation rate would be 0.8 percentage points lower by 2022."
"This will remain an essential priority even in the post-pandemic phase, given that the macroeconomic hit from the pandemic is likely to persist."
"The first challenge in delivering the medium-term inflation aim is to reconnect inflation to its pre-pandemic projected path."
"Tolerating a longer phase of even lower inflation than originally envisaged would be costly and risky."
Market reaction
The EUR/USD pair is edging lower in the last hour and was last seen losing 0.17% on a daily basis at 1.1893.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.