ECB announced to adopts a symmetric 2% inflation target over medium term. Being symmetric meaning “negative and positive deviations of inflation from the target are equally undesirable”.
“When the economy is operating close to the lower bound on nominal interest rates, it requires especially forceful or persistent monetary policy action to avoid negative deviations from the inflation target becoming entrenched,” ECB said. “This may also imply a transitory period in which inflation is moderately above target.”
Also, HICP will remain the appropriate price measures, while the Governing Council recommends inclusion of owner-occupied housing over time.
President Christine Lagarde said, “The new strategy is a strong foundation that will guide us in the conduct of monetary policy in the years to come.”
