ECB Executive Board member Yves Mersch sounded upbeat on his comments yesterday. He said that “all prerequisites for a sustainable adjustment of inflation to our objective are given.”
The central bank could continue to cut down its asset purchases gradually as inflation outlook improves. He’s concerned that there could be excessive market reactions if the asset purchases are reduced too quickly. And that would undo ECB’s hard work in the past few years.
Overall, for the time being, easy monetary policy is still needed to support inflation.
