Lagarde Yet to See Progress on Underlying Inflation Pressures

Q: Philip Lane said that the amount of assets that you purchase after PEPP finishes depends on the amount of debt issued by governments. Do you agree? At the moment there is a link to asset purchases ending and interest rates rising. Do you think there should be more of a gap or flexibility on that?

- A: There are three criteria to consider. First, we need to see the inflation outlook at target well ahead of the forecast horizon.

• Second, we have to see it through to the end of the forecast horizon.
• Three, we need to see progress in underlying inflation pressures. I think that we are quite far away.
• PEPP is a very specific emergency programme. When PEPP ends, we have all of our other instruments available. We clearly have the APP on a standing basis since October 2019 and that is clearly intended to be continued and this will be debated at the December meeting. This has not been discussed at this meeting. We don't pay special attention to the bond issuance of any particular country. We look at the entire universe of bonds that will be available.