Report
For many years, the ECB will have nothing but complete “empiricism”
The ECB's latest core inflation forecast is likely to be correct: it will rise slowly to 1.5% in 202 3 . But the ECB’s new inflation target is inflation “ firmly ” at 2%: that will not be the case at all in 202 3 . This means that for several years, the ECB will not have a strong (theoretical) monetary policy guideline, apart from the fact that it will have to contribute to an upturn in inflation and, therefore, that it will be impossible to exit the expansionary policy. We should therefore expect “empirical”, pragmatic management without theoretical foundations: Reduction in purchases of securities - which nevertheless will be muted - that will be difficult to explain ( to maintain the cohesion of the Governing Council and avoid excessive real estate price rises); Monitoring of long-term interest rates so that they do not rise too much, but without the possibility of a specific target. We will therefore have a "soft ECB".
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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