By Laurie Laird
— April meeting Affirms Conclusions of March gathering
LONDON (MaceNews) – The European Central Bank will continue to accelerate purchases through its emergency quantitative easing programme, with the eurozone economy still facing immediate downside risks.
An “ample degree” of monetary accommodation remains necessary, said ECB President Christine Lagarde, briefing reporters after Thursday’s meeting of the Bank’s Governing Council, adding that immediate risks are tilted “to the downside,” while the medium-term risks are “more balanced.”
Her remarks and accompanying statement differed little from the council’s conclusions after their previous meeting on 11 March, when Lagarde first announced plans to ramp up bond buying after a tightening of financial conditions, most notably, a rise in sovereign bond yields.
Lagarde repeated that the entire €1.85 trillion Pandemic Emergency Purchase Programme may not be exhausted, adding the now-familiar language that the facility could “equally” be recalibrated should the expected recovery not materialise. The eurozone economy likely contracted in the first three months of 2021 and is expected to return to pre-pandemic levels in the second half of next year, she added.
Given the uncertain outlook, the Governing Council “did not discuss any phasing out of the PEPP … which would be premature,” Lagarde said. Any reduction in PEPP purchases “would be data dependent.”
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Contact this reporter: laurie@macenews.com
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