ECB Minutes: Too relaxed – Nordea Markets

According to Jan von Gerich, analyst at Nordea Markets, the ECB Minutes reveal that the bank remains rather optimistic about the outlook and is not close to announcing new monetary policy measures.

Key Quotes

“The main message from the monetary policy account from the January meeting was that while the picture of growth risks has now moved to the downside, the ECB is still not overly worried about the outlook.”

“The central bank is taking its time in assessing the situation and its options, but there does not appear to be any urgency to announce changes to the monetary policy stance. The discussion on new monetary policy measures has not even really started yet. The recent data releases, however, give clear grounds to being more worried.”

“While the March meeting will offer the Governing Council much new information to judge the outlook, including fresh staff forecasts, new easing measures this soon do not look likely. The ECB still largely finds that financing conditions remain supportive.”

“We are looking for the ECB to announce new liquidity operations later in the spring or early summer, but the terms of such operations will be determined by the development of the outlook in the meantime. At the very least, bridge operations to the maturing targeted longer-term refinancing operations (TLTROs) should be expected.”