Markets are expecting ECB to expand its Pandemic Emergency Purchase Program next week. ECB Executive Board member Isabel Schnabel said, “one number . . . of particular interest is the evolution of the medium-term inflation outlook. If we see that the situation has deteriorated, and if we judge that further stimulus is needed then the ECB will be ready to expand any of its tools in order to achieve its price stability objective.”
In the same interview by Financial Times, she added the board is “not adjusting our monetary policy in any way in response” German constitutional court’s ruling against its QE program. “We have to avoid a situation in which one national central bank cannot participate in our asset purchase programmes,” she added. “I’m sure there is going to be communication between the Bundesbank and the German parliament and the German government, and one will have to find a solution”.
“Germany is one of the countries that has benefited a lot from the euro and therefore it shouldn’t be the country that is most critical about it,” she criticized. “Many of the narratives that are very popular in Germany cannot be maintained because they simply do not match the facts.”
