ECB Governing Council member Klaas Knot said, “today’s inflation outlook is clearly more favorable than it was pre-corona, in the sense that it’s closer to out target.”
“That’s something to take into account and that should also be a measure for the recalibration of asset purchases that we need to undertake in December,” he added.
Knot also predicts that the PEPP asset purchase would end in March, in spite of new pandemic restrictions being rolled out. He expects rate hike to happen some time after 2022. But, “if market is right on inflation, then it is also right on rates pricing.”
