ECB Chief Economist Philip Lane said in an FT interview, “we have an ongoing two-stage challenge — counter the negative pandemic shock to the inflation path and subsequently finish the task of raising inflation to our aim.”
“While we don’t think we are at the lower bound”, he added, “there is clearly less room to deliver monetary stimulus when interest rates are already low, compared to historical norms.”
“Our favourability assessment of financing conditions is dynamic,” he explained. “It does depend on how much progress we are making in terms of the inflation forecast. It is not yield curve control in the sense of saying we want to keep the yield curve at some fixed value; because over time the relation between the appropriate level of yields and inflation will move.
