ECB Governing Council member Erkki Liikanen spoke on monetary policy today:
- “We have been careful in our communication,” and “we said we’re extending net asset purchases until September and beyond if needed.”
- “And our monetary policy is and will be data dependent. So we must follow fresh incoming data every time,”
- “A gradual tightening of monetary policy will rest on a more solid basis when indications of inflation rates to potentially temporarily exceed two percent become more prominent in inflation expectations,”
- “The euro area inflation rate is sustainable when the ECB’s price stability objective can be met even without an exceptionally accommodative monetary policy,”
- ” If the economy will be stronger and more convergence will take place, the role of the net asset purchase program will be smaller. And at the same time the other three elements will gain more importance especially forward guidance.”
- But, “there will be no abrupt sudden changes even if one day the net purchases will be finished.”
- “Downside risk is mainly political. We must follow that attentively,”
