ECB: Doubling down (almost)

Summary

The ECB packed quite a punch today as it boosted its COVID-19 response strategy with a larger than expected expansion of its QE purchases under the Pandemic Emergency Purchase Program (PEPP), by €600 bn, to a total of €1350 bn and extended the purchase horizon to at least the end of June 2021.

Key points

• Key points:
• The ECB stands ready to adjust all of its instruments
• Significant downward revision of GDP and inflation projections
• Sharp contraction seems to bottom-out, but not enough to avoid an unprecedented recession while risks are to the downside

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