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ECB tone remains dovish

The most anticipated event of this week, the ECB policy meeting, has concluded and overall the tone still remains dovish.

Wednesday, September 8, 2021

The most anticipated event of this week, the ECB policy meeting, has concluded and overall the tone still remains dovish. The hawks publicly outnumber the doves now on the committee, but Christine Lagarde clearly has more of a deciding vote. While the markets were worried about the prospect of tapering of the pandemic emergency purchase programme (PEPP) purchases, Lagarde stated that instead they will slow the pace moderately of the bond buying programme (which sounds a lot like tapering by another name). Rates remain unchanged as widely expected. Acknowledging that inflation will moderately exceed the goal for a transitory period is much the same story we have heard all year and one has to question when this transient nature becomes more fixed. No doubt the press conference later on will raise more questions than answers about the tapering timeline.

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Charles Hepworth

Investment Director
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