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Published on Thursday, December 16, 2021

ECB WATCH | A faster tapering than expected

The ECB announced, as expected, the end of the PEPP in March, and approved several measures to soothe the cliff edge that this measure implies

Key points

  • Key points:
  • More hawkish tone after announcing the end of PEPP in March 2022 and a lower-than-expected increase of the APP
  • Lower rates under TLTROIII will end in June 2022, with a reassessment of the tier multiplier
  • GDP is revised marginally downwards in 2022 and upwards in 2023. Strong upward revision for inflation in 2022 but reverting clearly below 2% in the medium term
  • Flexibility will continue to be key, and PEPP may be resumed should pandemic conditions deteriorate

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