LONDON - The European Central Bank’s first meeting of the year is set to bring the formal launch of a strategy review, most likely including a rethink of an inflation goal the bank has failed to meet since 2013.
The first review of ECB policy since 2003 could be formally launched on Thursday, with the structure, timeline and agenda, as well as a process that could last all year likely to be debated. For sure, policymakers are keen to shape the debate. The ECB should consider a clearer inflation target, newest ECB board member Isabel Schnabel said last week.The ECB will be pressed on whether it thinks the worst is over for the economy and the implications for policy near term.
“We just have to see the surveys...translate into hard data, which obviously takes time,” said Marchel Alexandrovich, European financial economist at Jefferies. “Realistically the ECB is on hold for at least six months before even sending any shifts in terms of potential future policy changes.”Euro zone inflation jumped in December, adding to a sense that the outlook is improving and that the ECB can afford to bide its time after delivering hefty stimulus in September.
“As an economist, the biggest frustration is that we haven’t heard about Lagarde’s own convictions,” said Pictet Wealth Management strategist Frederik Ducrozet.4. Sweden just ditched its negative interest rate policy. Could the ECB follow?
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