The Monetary Committee of the European Central Bank (ECB) on 9 September was the most anticipated event of this re-entry on the old continent.
The ECB maintained its interest rates unchanged and reaffirmed its previous commitments. It will continue to inject €20 billion per month as long as necessary under the Asset Purchase Program. With a total budget of $1850 billion, the Pandemic Emergency Procurement Program will continue as planned until the end of March 2022.
On the other hand, the ECB decided to proceed slightly slower than the last two quarters when 80 billion were used each month. Without specifying the new amount of monthly interventions, Christine Lagarde, the President of the ECB, took care to emphasize that it was a recalibration, not a reduction. The message was well-received by investors, reassured by the ECB’s commitment to continue its accommodative policy for a long time to come.
For their part, economic agents were reassured by the positive message and the new economic forecasts of the ECB. The Frankfurt institution now forecasts GDP growth of 5% this year compared to 4.6% previously. Moreover, price slippage will be temporary, with inflation forecast at 1.7% in 2022 and 1.5% in 2023.
With a policy that will remain accommodating for a long time and an economic recovery, the outlook is good for the eurozone.
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