Reuters came out with an analytical piece backing the concerns over the European Central Bank’s (ECB) recalling the pandemic relief measures, known as the Pandemic Emergency Purchase Programme (PEPP), amid the early Asian session on Thursday.
The piece hints at, “a token step towards unwinding the emergency economic aid it put in place during the pandemic while still signalling copious support for years to come.”
“Any move is likely be at the margins, reflecting central bankers' fear that cutting support prematurely would undo years of stimulus – a dangerous prospect for the ECB, already struggling with a credibility deficit after nearly a decade of undershooting its inflation target,” adds Reuters.
The research quotes high inflation and expectations of easing price pressure, coupled with ECB’s readiness to acknowledge the coronavirus crisis and refrain to speak tapering, to back the cut of 60 billion to 70 billion euros per month for the fourth quarter from around 80 billion Euros in July.
“Policymakers are also expected to clash on their assessment of inflation, with some increasingly arguing that the recent rise may not be as temporary as the ECB has predicted,” said Reuters.
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