The European Central Bank’s policy guidance, including the expected order of its next steps, remains valid for now but could change if inflation fundamentals warrant, ECB Executive Board member Benoit Coeure said on Friday.
“Ultimately, also the choice of sequencing of policy instruments will be the outcome of our regular assessment of the medium-term price stability outlook, reflecting the state-dependent nature of our expectations of the horizon over which our policy instruments are likely to be maintained,” Coeure said.
Economic data suggest that while growth risks have been reduced, underlying inflation is weak with price growth still dependent of the ECB’s measures, Coeure added.
“In line with our forward guidance on the APP, this clearly suggests that current expectations on the intended horizon of our purchases, as encapsulated in our Introductory Statement, and on the sequencing of policy instruments, remain valid today,” Coeure said.
Some policymakers have argued that the ECB could raise rates before it ends asset buys, a move that would be counter to its current guidance, but many others have dismissed such a discussion, calling the order is logical.
Source: Reuters (Reporting by Francesco Canepa; Editing by Balazs Koranyi)