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ECB: Lane Re-iterates The Three Elements of the ECB's Reaction Function

ECB
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Key notes from the conclusion of ECB Chief Economist Lane's speech at today's MNI Webcast. Initial reaction is little new relative to previous ECB communique.

  • “The incoming information and the latest staff projections indicate that the disinflation process remains well on track”
  • “ Looking to the future, in the current environment of elevated uncertainty, it is prudent to maintain agility on a meeting-by-meeting basis and not pre-commit to any particular rate path”.
  • “In terms of risk management, monetary easing can proceed more slowly compared to the interest rate path embedded in the December projections in the event of upside shocks to the inflation outlook and/or to economic momentum”.
  • “Equally, in the event of downside shocks to the inflation outlook and/or to economic momentum, monetary easing can proceed more quickly”.
  • Lane re-iterates the ECB’s reaction function: “our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission”.
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Key notes from the conclusion of ECB Chief Economist Lane's speech at today's MNI Webcast. Initial reaction is little new relative to previous ECB communique.

  • “The incoming information and the latest staff projections indicate that the disinflation process remains well on track”
  • “ Looking to the future, in the current environment of elevated uncertainty, it is prudent to maintain agility on a meeting-by-meeting basis and not pre-commit to any particular rate path”.
  • “In terms of risk management, monetary easing can proceed more slowly compared to the interest rate path embedded in the December projections in the event of upside shocks to the inflation outlook and/or to economic momentum”.
  • “Equally, in the event of downside shocks to the inflation outlook and/or to economic momentum, monetary easing can proceed more quickly”.
  • Lane re-iterates the ECB’s reaction function: “our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission”.