- Must avoid vicious disinflation cycle
- ECB hasn’t exhausted all policy instruments
- ECB sought euro impact with recent decisions
- Euro has fastest transmission on inflation expectations
- Current package is “limited QE” (QE lite)
- Need to see if latest measures are enough (like they waited to see if previous measures were enough
- Changing gears on fiscal-policy side not helpful
- Euro countries lack progress on structural reforms
- Rate cut designed to bolster TLTRO take up
- ECB Sep projections a bit on the optimistic side
- Will initially rely on others for ABS buying
- Fed’s data driven guidance created problems
ECB’s Luc Coene speaking to Bloomberg