MNI BRIEF: QT Will Be 'Measured, Predictable' - ECB's Lagarde

The ECB will trim its balance sheet in a “measured and predictable way,” president Christine Lagarde said in a speech on Friday, with the key principles behind quantitative tightening to be set out on Dec 15.

”In the current environment, and acknowledging that interest rates remain the most effective tool for shaping our policy stance, it is appropriate that the balance sheet is normalised in a measured and predictable way,” she said.

“In December we will lay out the key principles for reducing the bond holdings in our asset purchase programme portfolio. In parallel, our tools for preserving the orderly transmission of monetary policy − notably flexible reinvestments under the pandemic emergency purchase programme and the new transmission protection instrument − will remain in place.” (See MNI SOURCES: ECB Weighs 50 In December, Hawks To The Fore)