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Calibrating the volume of asset purchases is important to ensure policy is accommodative – Philip Lane

The Chief Economist of the European Central Bank, Philip Lane, said on Monday that gauging the volume of asset purchases plays an important role in ensuring that monetary stance is accommodative enough to achieve the timely achievement of the 2% target in the medium term.

Featured statements – Reuters

“If the economy is close to the effective lower limit, it is vitally important to adopt particularly strong or persistent monetary policy action to prevent negative deviations from the inflation target from taking hold.”

“Compressing term premiums through the duration draw channel plays a quantitatively significant role in determining longer term returns.”

“An energy price shock can simultaneously raise headline inflation but put downward pressure on the path of core inflation.”

“A one-time change in the level of wages as part of the adjustment to a temporary unexpected increase in the price level does not imply a change in trend in the trajectory of core inflation.”

“Monitoring wage results and differentiating between temporary and persistent changes in the growth rate of wages will play an important role.”

Market reaction

These comments do not appear to have a significant impact on the performance of the common currency against its rivals. At the time of writing, the pair EUR/USD it was up 0.06% on the day at 1.1575.

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