Published on Thursday, July 8, 2021

ECB WATCH | ECB Strategy Review: 2% and mindful of climate change

The strategy review has been relatively moderate, introducing a symmetric and clearer (2%) inflatio target, and adopting as permanent the current toolkit. The change has been less ambitious than the one by the Fed. On climate change, the ECB is clearly more committed to specific action, but depends on other institutions

Key points

  • Key points:
  • In its new strategy review, the ECB adopts a symmetric 2% target, as expected. This is a moderate but welcome change
  • Interest rates will remain the primary tool, while “non-standard” measures will be part of the monetary policy toolkit, though no details are provided
  • The ECB firmly commits to climate change in the conduct of its monetary policy



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