ECB’s chief economist Philip Lane said today, “the medium-term inflation dynamic is too slow, not too fast.””We still think we’re some distance in terms of medium term from 2%,” he added. “The trigger for monetary policy action is not there.”
“In addition to rate forward guidance, calibrating the volume of asset purchases also plays an important role in ensuring that the monetary stance is sufficiently accommodative,” said.
“The compression of term premia through the duration extraction channel plays a quantitatively-significant role in determining longer-term yields and ensuring that financing conditions are sufficiently supportive to be consistent with the delivery of our medium-term inflation objective.”
