PEPP mitigated risk of sharp sell-off in markets – ECB’s Lane
European Central Bank (ECB) Chief Economist Philip Lane (pictured) said on Friday that the ECB’s governing council stands ready to adjust all of its instruments, as appropriate, adding that the pandemic emergency purchase programme (PEPP) increase is a proportionate response to the outlook.
“The ECB’s measures since mid-March have acted as a stabilizing force during the initial weeks of the pandemic crisis. The announcement of the PEPP has mitigated the risk of a sharp sell-off in bond and equity markets that was threatening to undermine our monetary policy stance and its effective transmission,” said Lane.
Lane also added that once the negative pandemic shock has been successfully managed, “the primary focus of monetary policy can return to its underlying strategic goal of robustly achieving our inflation aim over the medium term.”
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