- ECB's Executive Board member Panetta: A steeper nominal GDP-weighted yield curve must be resisted
Market news
2 March 2021
ECB's Executive Board member Panetta: A steeper nominal GDP-weighted yield curve must be resisted
- We must establish the credibility of our strategy by demonstrating that unwarranted tightening will not be tolerated
- We should not hesitate to increase the volume of purchases and to spending the entire PEPP envelope or more if needed
- Inflation increase only temporary
- The near-term growth outlook is also skewed downward
- Policy support will have to remain in place well beyond the end of the pandemic
- We will need to keep going until we see inflation sustainably reaching 2%, in an environment of robust growth and rising employment
- By keeping nominal yields low for longer, we can provide a strong anchor to preserve accommodative financing conditions
- Steepening in the nominal GDP-weighted yield curve we have been seeing is unwelcome and must be resisted
- Lower real yields would provide welcome additional stimulus, given how far we are from full capacity and subdued level of current and expected inflation
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