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ECB Watch: Guiding light
The ECB sought to strengthen its forward guidance but still left itself plenty of discretion regarding future monetary policy decisions. Asset purchases were not discussed today, and we still expect net PEPP purchases to end in March 2022. New guidance stipulates inflation will need to rise to the target already around the middle of the forecast horizon and actual core inflation needs to show sufficient progress for the ECB to consider hiking interest rates. The ECB stopped short of committing to keep rates low amidst higher inflation pressures, and left itself plenty of discretion – as a result the new guidance ... (full story)