Europe | Being predictable during uncertain times

Summary

Overall, the relatively modest downward revision in growth projections and the delinking of the tapering from the rate rise scenarios allows the ECB to convey a hawkish message while freeing itself to make the decision on rates more data dependent

Key points

• Key points:
• The ECB plans to end asset purchases in 3Q22 going ahead on its monetary policy normalization
• At the same time it delinks the end of APP from the rate hike decision, keeping the maximum optionality and flexibility under a very uncertain environment
• Limited economic forecast revision on growth, while medium term inflation forecasts remain in line with target

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