ECB stands ground against early lift-off, stresses temporality of inflation

Summary

The ECB deliberated substantially on two key topical issues concerning markets - 1) the central bank’s view on the drivers and durability of ongoing inflation pressures and 2) the disconnect between ECB’s forward guidance on rates and the market’s timeframe for a lift-off.

Key points

• Key points:
• ECB sees inflation pressures lasting longer than anticipated but easing over 2022
• It delves on the disconnect between ECB’s forward guidance on rates and market expectations of the lift-off timeframe
• PEPP is expected to end next March, with recalibration of the instruments to be in place at the December meeting

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