New president, same policy for now

Next week’s ECB poli c y meeting will be the first under the presidency of Mrs Lagarde. There will be an understandable desire by Mrs Lagarde to signal continuity, not least to prevent any big market moves as market participants are looking for any “ behavio u r al ” change of the post-Draghi ECB. Moreover, n either latest economic data nor geo-political developments demand any immediate policy response from the ECB. Thus, we expect the D ecember meeting to be uneventful and no policy an nouncement to be made. This is not to say, however, that there is a lack of interesting issues o n which next Thursday’s press conference may shed some light. It will be of particular interest to learn how Mrs Lagarde views the overall efficacy of monetary policy at this point, which would help to better assess the potential for further policy easing, should inflation continue to undershoot.