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As expected, the ECB announced a moderate slower pace of net asset purchases under the PEPP for next quarter, as compared to that in the previous two quarters. The decision was taken by unanimity by the Governing council on the back of favourable financing conditions and slightly better inflation outlook
The ECB reaffirmed the assessment for the Euro Area macro-economic outlook put forth in March's meeting. The ECB left monetary policy as well as forward guidance unchanged, with President Lagarde striking a note of cautious optimism over the medium term outlook while being cognizant of near term downside risks.
The ECB, as expected, left its benchmark interest rates and broader policy guidance unchanged, but surprised boldly by announcing a significant step up of asset purchases under the PEPP next quarter. The decision was a clear response to the recent increase in bond yields.
The European economy has begun the year immersed in a third wave of the pandemic which, although it is beginning to recede, will slow the recovery expected for this year.
Today’s wait and watch policy meeting suggests that the ECB will stay put in the short to medium-run regarding monetary policy, awaiting better clarity on the evolution of the pandemic, the recovery and financial conditions, while continuing to use the PEPP with high flexibility, preserving favourable financing conditions.
The ECB announced a comprehensive package focused on new liquidity and additional asset purchases measures to support households and firms facing increasing uncertainty.
Libra, Facebook's proposed global digital currency, has disappointed, with several partners abandoning the initiative and severe rejection by countless authorities on both sides of the Atlantic.
There was much curiosity surrounding Christine Lagarde's first press conference following a meeting of the ECB's Governing Council. This was not so much over the tone of monetary policy—which followed the same lines as in Mario Draghi's era—but over how she would act in a fractured field where some did not welcome her.