Regarding the “summer of 2019″, ECB provided some clarity in the June meeting accounts released today. The accounts recapped that ” policy rates would be kept at their present levels at least through the summer of 2019 and in any case for as long as necessary to ensure that the evolution of inflation remained aligned with a sustained adjustment path”.
The accounts noted that the wordings were seen to “strike a good balance between providing sufficiently precise guidance and maintaining adequate flexibility”. And, “the proposed state-contingent component of the forward guidance on policy rates was widely seen as underlining the gradual and data-dependent approach to policy normalisation.”
Also, ” explicitly linking a first policy rate rise to inflation evolving along a sustained adjustment path was seen as consistent with the ECB’s forward-looking and medium-term-oriented monetary policy strategy and would underscore the credibility of the Governing Council’s commitment to its price stability objective.”
The key take away is, ECB wants to reserve some “flexibility” which is understandable.
