In a blog post, ECB President Christine Lagarde said she expects net asset purchases under the APP to “end very early in the third quarter”. “This would allow us a rate lift-off at our meeting in July, in line with our forward guidance,” she said.
Also, “based on the current outlook, we are likely to be in a position to exit negative interest rates by the end of the third quarter,” she added.
Looking forward, the “next stage” of monetary policy normalization would “need to be guided by the evolution of the medium-term inflation outlook”.
“If we see inflation stabilizing at 2% over the medium term, a progressive further normalization of interest rates towards the neutral rate will be appropriate,” she said. “But the pace and overall scale of the adjustment cannot be determined ex ante.”
