- Inflation target os is for longer than one year
- ECB was surprised by very low March inflation
- Situation is of great concern
- ECB needs to see if inflation scenario has changed
- ECB unanimity of unconventional tools is very important
- France should comply with fiscal commitments made
Adam hit the nail on the head below. It’s a waiting game and you get the feeling that the ECB only want to hit the button in an emergency. As we’ve said previously, with regards to inflation, it’s probably one area where a central bank has very little control. Draghi said the busy bees at ECB HQ will be revising projections but that brings us no closer to knowing how and when the ECB will pull the trigger on a response. What we can be sure of is that they are now more worried about it than previously and that will weigh on the euro if we see lower inflation numbers from the states.
