Madis Muller, a member of the Governing Council of the European Central Bank (ECB), commented on Wednesday about increasing regular purchases of central bank PPP assets once they reduce the Pandemic Emergency Purchasing Program (PEPP).
Muller has added that any such push is uncertain, at the moment.
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“I realize that it would be a problem if there is a “cliff effect” at the end of the Pandemic Emergency Purchase Program.”
“One option would be to expand the pre-crisis plan above the current 20,000 million euros per month “.
“A possible increase from the older quantitative easing program is “part of the discussion we will have on how to phase out the PEPP and what it would mean for asset purchases in the future. “
“And, of course, the decision will depend on market conditions next spring and the economic outlook at that time.”
“Given the recovery that we are seeing in the economy, also the inflation outlook and, more importantly, the extremely favorable financing conditions that we continue to have in the euro area, we should be able to end the PEPP in March how it has been communicated and how the original plan has been “.
“If you ask me what the most likely outcome is for me personally, this is the base case.”
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