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MNI BRIEF: Centeno Dovish On Pace, Scale Of ECB Normalisation

MNI (London)
(MNI) London
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ECB asset purchases “could” stop in the early part of Q3 2022, Bank of Portugal governor Mario Centeno said in a speech Friday, with interest rates rising “some time later.” But patience and gradualism remain key, with the costs of aggressive monetary policy or too rapid normalisation outweighing the benefits.

Debate should focus not on when APP ends and rates rise, Centeno added, but on the process of monetary policy normalisation, its duration and its magnitude. “[T]he truth is that normalization has already started from the moment net purchases started to decrease, still in 2021 and continuing in 2022,” he said.

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ECB asset purchases “could” stop in the early part of Q3 2022, Bank of Portugal governor Mario Centeno said in a speech Friday, with interest rates rising “some time later.” But patience and gradualism remain key, with the costs of aggressive monetary policy or too rapid normalisation outweighing the benefits.

Debate should focus not on when APP ends and rates rise, Centeno added, but on the process of monetary policy normalisation, its duration and its magnitude. “[T]he truth is that normalization has already started from the moment net purchases started to decrease, still in 2021 and continuing in 2022,” he said.

Keep reading...Show less