Comments from the Bundesbank leader
- "Inflation is not dead"
- "In my estimation, the risks around the price outlook have shifted"
- "upside risks to price developments being predominant in the euro area"
- Wants to discuss when emergency ends from a monetary policy point of view
- Preconditions for ending net PEPP are that all major restrictions are lifted and the recovery is solid
- Immediate corona-related measures would then be reduced in both fiscal and monetary policy
- Net PEPP could be reduced step by step in advance
- Coming year would not be crisis year if assumptions about pandemic are confirmed
- Financing conditions still cheap
Weidmann wants to open the debate about ending, or when to end, pandemic measures. Those are fair questions to ask. The ECB has undershot its inflation target for years but it's not honest to run measures that were agreed for the pandemic as ultra-dovish policy in normal times.
