The report says that the ECB will brush aside calls for self-criticism and stand by its aggressive stimulus policy during the past decade in its strategy review. The review began in March and is believed to try and address issues such as whether QE, negative rates, and forward guidance have been appropriate tools in policymaking.
The sources said that the ECB is likely to keep a reference to the need for "especially forceful or persistent action" in justifying their past decisions to push for QE and other stimulus measures.
Meanwhile, there is said to be a general agreement that forward guidance should be used parsimoniously especially after it led to the ECB reacting too late to the inflation surge in 2021 and 2022. I think that was more of a case of ignorance though. Remember the whole "inflation is transitory" episode? Geez.
As for the review as a whole, the report notes that some policymakers are feeling a bit displeased with the preliminary conclusions though. They were hoping for it to be more critical on past policy decisions but it doesn't feel like it when viewing the sentiment above.
Well, much like the whole "inflation is transitory" episode in the past years, they're just not wanting to admit to any possible missteps they have made. Egoistic.
This article was written by Justin Low at www.forexlive.com. Read More Details
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