• Thursday’s ECB meeting will be another run-of-the mill meeting, despite what you might have read elsewhere and despite President Lagarde herself hyping up the meeting because of the strategy review. From what we gather, the ECB will simplify its communications and do away with the clunky Governing Council statement. We do hope the ECB does truly take a leaf out of the Fed’s playbook. The FOMC statement is short, to the point and void of useless technical language and jargon. And in his opening statement Chair Powell uses plain and concise language in stark contrast with the ECB’s page after page of mumbo jumbo.
  • And speaking of the strategy review, we haven’t published anything on the matter and will not do so either. From our perspective, which is the money market and the overall level of interest rates, it was a non-event. The ‘new’ 2% inflation target is formalizing what the ECB has already been saying since the final years of President Draghi tenure: 2.0% is much easier to communicate than inflation of below, but close to 2% (or is it close, but below 2%?). Given the ECB’s balance sheet largesse, negative interest rates and whatnot, we already know the ECB sees its target as symmetrical. Nothing to see here.

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