ECB will revisit issue on July 22
Lagarde was hammered today with questions about what the change in ECB mandate means and she bumbled her answers.
A sources leak from Reuters revealed one of the reasons why: Because her marching orders from the governing council were unclear.
One of the reasons is that some argued that it wasn't a monetary policy meeting so it wasn't the time to have that debate. However that change could be coming with the report saying 'a sizeable chunk' of policymakers argued that forward guidance should be adjusted.
Others opposed that saying a symmetrical target isn't very different and that adding house prices into inflation raises prices, accomplishing some of their goal.
Lagarde might have been wise to defer to July 22 rather than trying to bamboozle market watchers. This report highlights that something could be coming. At the same time, the market is pricing in low ECB rates for years so I'm doubtful that the euro is going to care much either way.
