ECB accounts hint at a communication debate - Rabobank

The January minutes released yesterday confirmed earlier remarks that the ECB’s communication would have to evolve gradually in line with the economy, in order to avoid having to make abrupt changes at a later stage, according to analysts at Rabobank.

Key Quotes

“In that respect, some members wanted to drop the easing bias regarding the asset purchase programme. However, at this time the Governing Council judged changes in the communication as premature, and not yet justified by the stronger confidence that inflation will converge back to the ECB’s target. That said, the minutes did reaffirm that the language “could be revisited early this year”.”

“We expect some changes to occur in March, supported by the new staff projections. Especially the condition that the asset purchases may be increased if the economic outlook deteriorates seems difficult to uphold, and in light of the above discussion, we would look for changes to this part of the communication in particular.”