The policymakers of the European Central Bank will hold a special meeting in Frankfurt next week to reach a decision on a new definition of price stability, as a part of the institution’s strategy review, Bloomberg reports, citing comments from David Marsh, Chairman of the Official Monetary and Financial Institutions Forum.
Key takeaways
“The meeting is expected to start with a Governing Council dinner on Tuesday and could extend through Thursday.”
“An announcement may be made afterward if agreement can be reached.”
“There’s broad consensus that the current inflation target of “below, but close to, 2%” should change, but disagreement on what should replace it. Some favor a precise goal of 2% with the flexibility to reach it, and some — especially from southern Europe — want an explicit pledge to tolerate higher rates after shortfalls.”
“The discussion may also shape the ECB’s plans for when and how to exit the emergency measures it deployed during the pandemic.”
Market reaction
EUR/USD remains under pressure around 1.1850 amid broad-based US dollar strength, unfazed by the tentative announcement of the ECB’s special strategy meeting next week.
