ECB’s Schnabel: Will significantly step up purchases under PEPP in Q2
"A growing body of evidence suggests that the potential benefits of pushing rates lower may diminish when uncertainty fades," Isabel Schnabel, Member of the Executive Board of the European Central Bank (ECB) said on Thursday, per Reuters.
"We will continue to deploy this envelope resolutely and efficiently, guided by our commitment to price stability."
"When rates have been low for a long time, fewer and fewer firms and households are left to respond to an additional monetary policy impulse."
"Will significantly step up purchases under the PEPP in the second quarter, in line with market conditions."
"Lowering interest rates further from very low levels may not only result in diminishing returns, it may also come with increased costs."
"Once higher nominal rates can go hand-in-hand with higher growth and higher actual inflation in the future, they are not a good indicator of the degree of monetary policy accommodation."
"If market conditions require, the pace and composition of purchases can be flexibly adjusted in both directions at any time."
"An increase in real interest rates is not necessarily a sign that financing conditions are becoming less favourable."
"There are, however, instances where rising rates would unduly tighten our policy stance."
The EUR/USD pair remains under strong bearish pressure following these comments and was last seen losing 0.37% on a daily basis at 1.1770.
via FXStreet News https://ift.tt/3tYkUTd
March 25, 2021 at 10:16AM